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Social  Science  ZcxUJBooUs 

Edited  by   RICHARD   T.   ELY 


AGRICULTURAL   ECONOMICS 


SOCIAL  SCIENCE   TEXT-BOOKS 

Edited  by  Richard  T.  Ely 


OUTLINES    OF   ECONOMICS 

By    Richard    T.    Ely,    Ph.D.,    LL.D.     Revised    and 
enlarged  by  the  Author  and  Thomas  S.  Adams, 
Ph.D.,     Max    O.     Lorenz,     Ph.D.,     Allyn     A. 
Young,  Ph.D. 
OUTLINES    OF   SOCIOLOGY 

By  Frank  W.  Blackmar,   Ph.D.,  and   John   Lewis 
GiLLiN,  Ph.D. 
HISTORY   OF   ECONOMIC    THOUGHT  (Revised   Edi- 
tion) 
By  Levv^is  H.  Haney,  Ph.D. 
BUSINESS  ORGANIZATION  AND   COMBINATION 

By  Lewis  H.  Haney,  Ph.D. 
PROBLEMS    OF   CHILD   WELFARE 

By  George  B.  Mangold,  Ph.D. 
SOCIAL  PROBLEMS 

By  Ezra  T.  Towne,  Ph.D. 
THE   NEW   AMERICAN   GOVERNMENT 

By  James  T.  Young,  Ph.D. 
COMPARATIVE   FREE   GOVERNMENT 

By  Jesse  Macy,  LL.D.,  and  John  W.  Gannaway,  M.A. 
AMERICAN   MUNICIPAL   PROGRESS 
By  Charles  Zueblin. 

APPLIED    EUGENICS 

By  Paul  Popenoe  and  Roswell  S.  Johnson,  M.S. 

AGRICULTURAL   ECONOMICS 

By  Henry  C.  Taylor,  M.S.  Agr.,  Ph.D. 

THE   LABOR   MARKET 

By  Don  D.  Lescohier,  Ph.D. 


AGRICULTURAL 
ECONOMICS 


BY 


HENRY   C.    TAYLOR 

CHIEF  OF  THE   OFFICE   OF  FARM   MANAGEMENT 

U.S.    DEPARTMENT   OF  AGRICULTURE 

ONE  TIME  PROFESSOR  OF  AGRICULTURAL  ECONOMICS 

IN  THE  UNIVERSITY  OF  WISCONSIN 


Weto  gork 

THE    MACMILLAN    COMPANY 

1920 

All  rights  reserved 


Copyright,  1919, 
By  the  MACMILLAN  COMPANY. 


S«t  up  and  electrotyped.    Published  November,  1919. 


Noriuaol)  }^rttt 

J.  8.  Cuohing  Co.  —  Berwick  &  Smith  Co. 

Norwood,  Ma«8.,  U.S.A. 


RICHARD   T.    ELY 

A    STUDENT    WITH    AN    EVER    YOUTHFUL    AND    OPEN 

MIND    AND    A    TEACHER    WHO    GIVES    AN 

INSPIRATION    THAT    LASTS 


PREFACE 

This  book  is  intended  for  the  student  and  the  farmer  inter- 
ested in  the  study  of  those  economic  principles  which  underlie 
the  effective  organization  of  the  farm,  and  for  the  statesman 
interested  in  establishing  laws  and  institutions  for  the  develop- 
ment of  agriculture.  The  subjects  treated  correspond  to  those 
studies  grouped  under  the  head  of  Farm  Management  in  some 
colleges  and  under  the  head  of  Agricultural  Economics  in  others. 
From  the  author's  point  of  view  these  two  terms  as  used  at 
the  present  time  cover  essentially  the  same  subject  matter  so 
far  as  they  relate  to  the  economics  of  production  on  the  indi- 
vidual farm,  but  he  believes  that  the  latter  term  is  much  the 
broader,  including  also  the  problems  of  marketing,  land  eco- 
nomics, farm  finance,  and  farm  life. 

The  matter  here  presented  is  the  result  of  a  gradual  develop- 
ment of  twenty  years  of  study  in  this  field.  Its  publication 
marks  the  close  of  seventeen  years  of  teaching  of  agricultural 
economics  by  the  author  in  the  University  of  Wisconsin,  where 
he  first  gave  a  course  to  the  short-course  students  in  the  winter 
of  1902-1903,  at  which  time  a  "Syllabus  of  Lectures  on  Agricul- 
tural Economics"  was  printed  for  the  use  of  his  class.  In  1905 
"An  Introduction  to  the  Study  of  Agricultural  Economics," 
containing  thirteen  chapters,  was  published,  the  main  points 
of  which  have  been  included  in  the  present  volume.  For  many 
years,  parts  of  the  present  volume  have  been  mimeographed 
and  used  in  the  classroom. 

J  While  the  author  has  been  working  in  this  field  for  twenty 
years  he  recognizes  that  the  pioneer  stage  is  only  now  passing 
and  that  the  next  few  years  will  result  in  great  progress  both 
in  research  and  education  in  agricultural  economics.  The 
present  treatise  is  looked  upon  as  being  by  no  means  a  final 
statement  on  the  subject,  but  the  author's  change  of  position 


vm  PREFACE 

and  the  demand  on  the  part  of  many  of  his  former  students 
for  the  materials  which  have  been  accumulated  in  his  experience 
as  a  teacher  make  it  seem  advisable  to  publish  this  volume 
in  its  present  form  with  the  expectation  that  in  a  few  years 
the  rapid  development  of  the  subject  will  make  it  possible  to 
make  a  much  more  adequate  statement  of  the  subject  than  is 
here  presented. 

The  author  wishes  especially  to  thank  Professors  Richard 
T.  Ely,  T.  N.  Carver,  W.  J.  Spillman,  and  G.  F.  Warren,  who 
have  been  of  great  help  to  him  from  time  to  time,  in  conferences 
and  through  correspondence,  in  clearing  up  many  of  the  diflS- 
cult  problems  in  this  field.  He  has  also  received  help  from  time 
to  time  from  the  succession  of  students  who  have  been  in  his 
classes.  In  leaving  the  classroom  to  enter  upon  activities 
in  the  Government  Service  the  author  will  miss  the  stimulus 
which  he  has  received  from  year  to  year  through  contact  with 
students.  He  is  hoping  that  students  who  have  occasion  to 
use  this  book  will  feel  free  to  write  to  him  in  regard  to  any 
of  the  subjects  discussed  in  order  that  he  may  in  some  degree 
continue  to  keep  in  touch  with  student  thought  on  this  subject. 


CONTENTS 

CHAFTEK  PAGE 

I.    Agricultural    Economics    Defined    and    Described  i 

II.    Economic  Motives  and  Ideals  in  Agriculture    .        .  13 

III.    Development  of  the  Farmer's  Economic  Problem    .  20 

rV.    Economic  Goods  and  Their  Valuation        ...  31 

V.    The  Choice  of  Crops 43 

VI.    Economics  of  the  Livestock  Industry        ...  54 
VII.     Miscellaneous    Work    Correlated   with    Crop   and 

Livestock  Enterprises 62 

VTTT.    What  Should  the  Nation  Produce?    ....  68 

IX.    Land  as  a  Basis  of  Agricultural  Production           .  79 

X.     Farm  Equipment 93 

XI.    The  Human  Basis  of  Agricultural  Production       .  102 
XII.    The  Choice  and  the  Combination  of  the  Grades  of 

the  Factors  of  Production 116 

XIII.  The  Proportions  of  the  Factors  of  Production       .  132 

XIV.  The  Size  of  Farms 154 

XV.    Farm  Labor  and  Wages 168 

XVI.    Farm  Credit  and  the  Rate  of  Interest     .        .        .178 

XVII.    Rents  and  Profits 190 

XVIII.    The  Value  of  Farm  Land  and  Equipments         .        .  204 
XIX.    The  Farmer's  Means  of  Acquiring  Land    .        .        -215 

XX.    Tenant  Farmers  in  the  United  States  Prior  to  1880  238 
XXI.    Farm  Ownership  and  Tenancy  in  the  United  States 

smcE  1880 251 

XXII.    Forms  of  Land  Tenure  in  the  United  States  .        .270 
XXIII.    Forms  of  Land  Tenure  in  the  United  States  (Con- 

tinued) 285 

iz 


X  CONTENTS 

CHAPTER  PAGE 

XXIV.  The  Decline  of  Landowning  Farmers  in  England  .  305 

XXV.  Relations    between    Landlords    and    Tenants    in 

England 323 

XXVI.  Marketing  Farm  Products 352 

XXVII.  The  Farmer  and  the  Middleman         .        .        .        -357 

XXVIII.  Price-Fixing  and  the  Cost  of  Farm  Products  .        .  366 

XXIX.  The  Social  Side  of  Farm  Life 380 

XXX.    Methods  of  Studying  Agricultural  Economic  Ques- 
tions        405 


AGRICULTURAL   ECONOMICS 


AGRICULTURAL  ECONOMICS 

CHAPTER  I 
AGRICULTURAL  ECONOMICS   DEFINED   AND   DESCRIBED 

The  subject  matter  of  Economics  is  found  in  the  relations 
arising  among  men  in  their  efforts  to  satisfy  their  wants  for  food, 
clothing,  shelter,  and  the  many  conveniences  and  luxuries  of  life. 

Such  a  relation  arises  when  one  man  has  wheat  to  sell  and 
another  wishes  to  buy  wheat.  Here  the  problem  is  that  of 
agreeing  upon  the  price  at  which  the  wheat  is  to  be  transferred. 
Other  economic  relations  arise  when  the  use  of  land  is  to  be 
secured  either  by  lease  or  by  purchase,  when  equipments  are 
to  be  purchased,  and  when  labor  is  to  be  employed.  In  all 
these  cases  the  relation  centers  upon  the  question  of  price 
fixing,  i.e.  the  agreement  upon  a  rental  for  land,  a  price  for 
equipment,  and  a  wage  for  labor.  These  relations  which  focus 
upon  price  determine  in  a  large  measure  the  character  of  the 
work  which  men  will  do,  what  they  will  produce,  and  the  methods 
they  will  use  in  producing  them.  Thus  it  is,  that  choice  of  a 
farm,  choice  of  hve  stock  and  machinery,  the  choice  of  crops, 
the  size  of  farms,  the  grouping  of  farm  enterprises,  the  intensity 
of  culture,  and  hundreds  of  smaller  matters  which  arise  from 
day  to  day  have  to  be  settled  in  terms  of  the  prices  of  things 
used  in  production,  that  is,  the  cost,  and  the  prices  which  can 
be  secured  for  the  different  articles  which  may  be  produced. 
The  farm  manager,  in  deciding  upon  what  to  do  and  what  not 
to  do  to  secure  a  maximum  profit,  bases  his  choices  upon  relative 
costs  and  relative  prices. 

There  are  those  who  look  upon  economic  problems  not  as 
problems  of  production,  but  problems  of  distribution,  that  is, 
the  problem  of  sharing  the  food,  clothing,  and  shelter  among 


2  AGRICULTURAL   ECONOMICS 

those  who  want  it.  Economics  has  to  do  with  production  as  well 
as  with  distribution.  If  all  human  wants  could  be  satisfied 
without  any  effort,  there  would  be  no  economic  problem,  neither 
of  production  nor  of  distribution.  But  while  she  has  provided 
abundant  opportunities  for  producing  the  means  of  satisfying 
human  wants,  Nature  has  decreed  that  man  must  work,  — 
"  In  the  sweat  of  thy  face  shalt  thou  eat  bread."  Or  to  give 
Virgil's  version  of  the  same  law, 

The  sire  of  all,  great  Jove  himself  decreed 

No  work  save  those  that  task  us  should  succeed. 

Since  it  is  by  work  that  the  wants  of  men  are  satisfied,  it  is  of 
general  interest  that  this  work  shall  be  so  directed  as  to  yield 
the  largest  possible  returns  in  human  satisfaction.  Viewed 
from  this  standpoint  it  may  be  said  that  economics  is  first  of  all 
a  treatment  of  the  economy  of  energy  required  for  the  satis- 
faction of  human  needs.  It  is  desirable  that  the  energy  re- 
quired for  the  satisfaction  of  human  wants  be  used  most  eco- 
nomically, not  that  men  may  work  less  strenuously,  but  that 
they  may  live  more  abundantly. 

Farming  is  often  spoken  of  as  the  most  independent  of  all  oc- 
cupation, and  it  is  true  that  the  farmer  is  less  dependent  upon 
his  fellow  men  than  is  his  city  brother.  But  while  the  farmer 
is  brought  into  vital  contact  with  other  men  less  frequently 
than  is  the  merchant  or  the  manufacturer,  yet,  on  the  other 
hand,  he  is  brought  into  much  more  vital  contact  with  Nature. 
The  manufacturer,  for  example,  may  know  each  evening  what 
tasks  are  to  engage  his  attention  the  next  day,  but  the  farmer 
simply  knows  what  he  would  hke  to  do,  and  awaits  the  dicta- 
tions of  the  weather.  Socially  considered,  the  farmer  may  be 
more  independent  than  the  man  of  the  city,  but  he  is  certainly 
more  directly  dependent  upon  the  conditions  set  by  his  physical 
environment.  Much  that  is  characteristic  of  farm  economics 
as  a  field  of  special  inquiry  grows  out  of  this  dependence  upon 
Nature.  This  is  shown  especially  in  the  influence  of  the  sea- 
sons and  the  laws  of  plant  growth  upon  the  variety  of  work  which 
the  farmer  performs. 


AGRICULTURAL  ECONOMICS  DEFINED  AND  DESCRIBED      3 

But  while  the  farmer  may  be  more  directly  dependent  upon 
Nature  than  are  those  engaged  in  the  industries  of  the  city, 
he  is  by  no  means  independent  of  his  fellow  men.  The  pioneer 
fanner,  who  looked  primarily  to  the  satisfaction  of  the  wants 
of  his  own  household,  may  have  selected  the  crops  which  he 
cultivated,  without  giving  any  thought  to  the  needs  of  other 
men ;  but  the  modern  farmer,  who  produces  primarily  for  the 
market,  and  procures  upon  the  market  a  large  share  of  the 
necessaries,  conveniences,  and  luxuries  of  life,  is  bound  to  take 
into  account  the  demands  of  his  fellow  men.  The  modern 
farmer  must  consider  the  price  for  which  the  produce  can  be 
sold  as  well  as  the  costs  of  production,  if  he  would  manage  his 
farm  successfully. 

This  close  dependence  of  the  farmer  upon  physical  and  social 
conditions  which  are  subject  to  variation  from  year  to  year 
makes  it  unprofitable  for  him  to  manage  his  work  by  rule  of 
thumb.  He  must  follow  general  principles  rather  than  specific 
rules.  He  is  always  being  required  to  adjust  himself  to  new 
commercial  conditions.  Demands  are  being  made  upon  his 
judgment  many  times  in  the  course  of  each  day's  work,  as  he 
tries  to  adjust  his  farm  operations  to  the  varying  conditions  of 
soil  and  climate,  ever  holding  in  mind  the  demands  of  his  market 
and  the  cost  of  each  of  the  agencies  of  production,  namely, 
land,  labor,  and  equipment.  It  is  necessary  that  the  farmer  be 
ever  alert.  "  It  is  a  maxim  universally  agreed  upon  in  agri- 
culture," says  Pliny,  "  that  nothing  must  be  done  too  late ; 
and  again,  that  everything  must  be  done  at  its  proper  season ; 
while  there  is  a  third  precept,  which  reminds  us  that  oppor- 
tunities lost  can  never  be  regained."  It  is,  therefore,  of  ex- 
ceedingly great  importance  that  the  farmer  have  in  mind  some 
guiding  principles  which,  Uke  the  compass,  will  enable  him  to 
direct  his  actions  in  accordance  with  a  definite  purpose. 

There  remains  until  this  day  that  class  who  fail  to  recognize 
the  presence  of  natural  laws,  and  who  attribute  the  unusual 
success  of  the  men  of  extraordinary  abihty  to  dishonesty  or  to 
foul  play  of  some  sort,  while  to  "  bad  luck  "  they  ascribe  the 
results  of  their  own  lack  of  foresight,  lack  of  judgment,  or  lack 


4  AGRICULTURAL   ECONOMICS 

of  industry.  These  men  who  talk  of  "  luck  "  and  who  are  not 
willing  to  attribute  to  brain  and  brawn  the  success  of  their 
neighbors,  may  well  draw  a  lesson  from  the  following  story, 
related  by  Pliny,  the  ancient  writer  already  quoted : 

"  C.  Furius  Chresimus,  a  freedman,  having  found  himself 
able,  from  a  very  small  piece  of  land,  to  raise  far  more  abun- 
dant harvests  than  his  neighbors  could  from  the  largest  farms, 
became  the  object  of  very  considerable  jealousy  among  them, 
and  was  accordingly  accused  of  enticing  away  the  crops  of 
others  by  the  practice  of  sorcery.  Upon  this,  a  day  was  named 
for  his  trial.  Apprehensive  of  being  condemned,  when  the 
question  came  to  be  put  to  the  vote  among  the  tribes,  he  had 
all  his  implements  of  husbandry  brought  into  the  Forum  to- 
gether with  his  farm  servants,  robust,  well-conditioned,  and 
well-clad  people.  The  iron  tools  were  of  first-rate  quality, 
the  mattocks  were  stout  and  strong,  the  plowshares  ponderous 
and  substantial,  and  the  oxen  sleek  and  in  prime  condition. 
When  all  this  had  been  done,  '  Here,  Roman  citizens,'  said  he, 
*  are  my  implements  of  magic ;  but  it  is  impossible  for  me  to 
exhibit  to  your  view,  or  to  bring  into  this  Forum,  those  mid- 
night toils  of  mine,  those  early  watchings,  those  sweats,  and 
those  fatigues.'  Upon  this,  by  the  unanimous  voice  of  the 
people,  he  was  immediately  acquitted." 

It  is  highly  desirable  to  emphasize  the  importance  of  strenuous 
mental  and  physical  effort  in  winning  success  in  farming.  The 
element  of  uncertainty  should  not  be  underrated,  for  this  is 
one  of  the  characteristics  of  farming ;  but  it  should  be  remem- 
bered that  as  a  rule  the  chance  element  is  more  or  less  equal 
in  a  given  community,  and  at  a  given  time,  for  all  those  who  are 
competing  for  high  rank  as  farmers.  The  big  differences  are 
due  to  differences  in  the  farmers  themselves,  in  their  alertness 
and  in  the  quality  of  their  muscles  and  their  minds.  The  more 
rational  farmers  are  usually  willing  to  admit  that  the  unusual 
degree  of  success  attained  by  one  of  their  number  is  the  result 
of  hard  work,  clear  thinking,  and  skillful  management.  These 
more  intelligent  farmers  are  coming  to  recognize  that  there  are 
fundamental  economic  principles  which,  when  carefully  followed, 


AGRICULTURAL  ECONOMICS  DEFINED  AND  DESCRIBED      5 

lead  the  way  to  success  in  agricultural  production.  To  under- 
stand these  principles  is  the  reason  for  studying  agricultural 
economics. 

Of  the  recent  writings  on  agricultural  economics  in  Europe, 
that  of  Jouzier,  a  French  writer,  may  be  taken  to  illustrate  the 
content  of  the  phrase.  "Philologists,"  says  Jouzier,  "tell  us 
that  the  word  economics  is  formed  of  two  Greek  words,  which, 
united,  mean  laws,  or  rules  of  the  household,  that  is  to  say, 
developing  the  idea  which  the  ancients  attached  to  the  words, 
the  manner  of  regulating  the  relations  of  the  different  elements 
composing  the  resources  of  the  household,  whether  it  be  their 
relations  to  each  other  or  to  the  members  of  the  household, 
in  order  to  insure  the  greatest  prosperity  of  the  family.  i 

"The  addition  of  the  qualifying  adjective,  agricultural,  does 
not  change  the  meaning  of  the  word  '  economics '  at  all ;  it 
simply  limits  the  domain  to  which  it  is  to  be  applied.  In 
place  of  saying  'the  household'  we  must  say  the  'agricultural 
household.'  But,  as  the  agricultural  household  is  the  farm 
we  shall  say  that  Agricultural  Economics  is  thai  branch  of 
agricultural  science  which  treats  of  the  manner  of  regulating  the 
relations  of  the  different  elements  composing  the  resources  of 
the  farmer,  whether  it  be  their  relations  to  each  other  or  to  human 
beings  in  order  to  secure  the  greatest  degree  of  prosperity  to  the 
enterprise. 

"These  relations  consist  in  (i)  relations  of  contact  (supple- 
mentary, complementary,  or  competitive)  between  the  different 
branches  of  the  enterprise,  such  as,  for  example,  the  simul- 
taneous raising  of  cereals  and  animals  on  the  same  farm ; 
(2)  relations  of  activity  between  the  different  means  employed  in 
the  process  of  production,  as  in  the  simultaneous  employment  of 
machinery  and  human  labor ;  (3)  in  relations  of  value,  between 
the  means  employed  in  production  and  the  product  itself; 
(4)  in  commercial  relations  with  the  people  to  whom  farmers 
sell  their  products  or  from  whom  they  buy  goods. 

"The  domain  of  Agricultural  Economics,  then,  covers  the 
examination  of  each  element  of  agricultural  production,  whether 
in  connection  with  any  one  of  the  above  named  relationships 


6  AGRICULTURAL  ECONOMICS 

in  particular,  or  with  several  of  them  together,  for  the  purpose 
of  obtaining  the  greatest  net  profit. 

"  We  may  consider  Agricultural  Economics  as  a  science  or 
as  an  art,  from  a  theoretical  point  of  view  or  from  a  practical 
point  of  view.  If  we  consider  it  as  a  science  or  theory,  it  is 
the  knowledge  of  the  laws  which  govern  the  above  named  rela- 
tions ;  if  as  an  art  or  practical  matter,  it  is  the  application  of 
this  knowledge  in  a  Umited,  particular  environment  for  the 
realization  of  results  from  these  relationships." 

It  will  be  clear  from  this  statement  that  Jouzier  looks  upon 
farm  economics  as  (i)  the  science  which  treats  of  the  principles 
which  underHe  the  coordination  of  all  the  factors  involved  in 
farming  (land,  labor,  equipments,  and  the  various  lines  of  pro- 
duction) in  such  a  manner  as  will  enable  the  farmer  to  secure 
maximum  net  profits,  and  (2)  the  art  of  applying  these  princi- 
ples on  a  given  farm, 

Jouzier's  definition  may  be  accepted  as  describing  that  part 
of  the  field  of  agricultural  economics  which  relates  to  the 
organization  and  the  operation  of  the  farm,  but  it  fails  to  in- 
clude all  of  the  subject  matter  of  agricultural  economics  as 
conceived  in  the  United  States  to-day,  and  it  fails  to  include 
the  social  point  of  view  which  needs  to  be  considered  as  weOs 
the  individual  point  of  view  when  recommending  changes  in 
our  laws  and  institutions  which  affect  the  agricultural  interests 
of  the  country. 

Agricultural  economics  deals  with  the  principles  which  under- 
lie the  farmer's  problem  of  what  to  produce  and  how  to  produce 
it,  what  to  sell  and  how  to  sell  it  in  order  to  secure  the  largest 
net  profit  for  himself  consistent  with  the  best  interest  of  society 
as  a  whole.  More  specifically  agricultural  economics  treats 
of  the  selection  of  land,  labor,  and  equipments  for  a  farm,  the 
choice  of  crops  to  he  grown,  the  selection  of  live  stock  enterprises 
to  he  carried  on,  and  the  whole  question  of  the  proportions  in  which 
all  these  agencies  should  be  combined.  These  questions  are 
treated  primarily  from  the  point  of  view  of  costs  and  prices. 
The  economic  basis  for  answering  these  questions  is  found  in 
the  price  of  land,  the  wages  of  labor,  the  cost  of  tools,  machinery, 


AGRICULTURAL  ECONOMICS  DEFINED  AND  DESCRIBED      7 

and  live  stock,  and  the  prices  for  which  the  various  products 
can  be  sold. 

Agricultural  economics  deals  not  only  with  economy  in  pro- 
duction but  also  with  the  problems  of  justice  in  the  distribution 
of  wealth  among  the  various  classes  of  society  with  especial 
reference  to  the  effect  of  the  wages  system,  the  land  system, 
the  credit  system,  the  methods  of  marketing,  the  comparative 
standards  of  living  of  country  and  city  workers,  and  the  rela- 
tive opportunities  for  accumulating  wealth  by  the  different 
classes,  upon  the  farmer's  share  in  the  national  dividend  and 
upon  the  relative  well-being  of  the  agricultural  population. 
This  subject  requires  the  attention  of  the  agrarian  statesman  as 
well  as  that  of  the  farmer.  The  farmer  needs  to  understand 
the  economic  forces  which  underlie  his  success  in  order  to  help 
himself,  and  the  statesman  needs  to  understand  these  forces  in 
order  that  he  may  pass  helpful  legislation  with  respect  to  land, 
labor,  credit,  taxation,  marketing,  etc.,  and  in  order  that  the 
necessary  regulation  of  the  farmer's  activity  may  be  carried  out 
with  a  minimum  of  reduction  in  productivity. 

While  the  economic  prin|i|ies  which  govern  the  management 
of^mns  can  be  formlftatea^n  should  be  borne  in  mind  that  no 
specific  rules  can  be  laid  down,  which  are  of  general  applica- 
tion. Farms  cannot  be  operated  by  rule  of  thumb.  What  is 
right  practice  at  one  time  is  wrong  at  another  time,  and  what  is 
right  practice  in  one  place  is  wrong  in  another.  The  best 
scientific  training  that  could  be  given  to  farmers  would  com- 
prise a  thorough  knozvledge  of  the  physical  and  biological  principles 
which  underlie  agriculture,  the  laws  of  economics  which  relate  to 
agriculture,  and  a  thorough  system  of  accounting  for  the  purpose 
of  testing  results  on  the  individual  farm.  Any  system  which 
purports  to  furnish  a  complete  scheme  of  farm  administration 
applicable  to  all  conditions,  is  manifestly  either  Utopian  or 
fraudulent.  Such  rules  must  be  worked  out  upon  and  for  the 
individual  farm,  or  at  most  for  well-defined  communities  where 
the  conditions  are  similar. 

Economics  is  scientifically  coordinate  with  the  physical  and 
biological  sciences  in  the  study  of  agricultural  problems.     The 


8  AGRICULTURAL  ECONOMICS 

conditions  and  forces  in  the  farmer's  environment  which  in- 
fluence his  activities  as  a  farm  operator  constitute  the  subject 
matter  of  agricultural  investigation  and  education.  In  the  early- 
history  of  agricultural  education,  the  economic  aspects  of  the 
problem  of  the  farmer  received  a  large  proportion  of  the  space  in 
the  books  on  agriculture.  This  is  true  of  the  Roman  books  on  Agri- 
culture and  it  is  true  of  the  English  works  pubKshed  prior  to  1840. 
With  the  development  of  Agricultural  Chemistry,  Agricul- 
tural Physics,  Agricultural  Bacteriology,  Plant  Pathology,  etc., 
these  aspects  of  the  farm  problem  were  brought  to  the  fore- 
ground, and  the  physical  and  biological  aspects  became  dominant 
in  the  publications  on  agriculture.  The  chemist,  for  example, 
has  used  the  most  approved  scientific  methods  in  his  investiga- 
tions. Naturally  he  has  discredited  much  that  was  counted 
good  doctrine  on  the  subject  of  agriculture.  But  while  they 
have  discredited  much  that  was  once  held  as  true,  the  scientists 
trained  in  the  physical  and  biological  sciences  have  not  been 
able  to  replace  the  old  with  a  complete  system  of  knowledge  for 
the  farmer.  Many  of  the  bulletins  published  by  experiment 
stations  have  been  wrought  out  wi^_great  care  by  the  specialist 
learned  in  some  one  science  and  rP^^  pieced  together  with  the 
most  unlearned  notions  regarding  other  aspects  of  the  problem, 
and  especially  the  economic  aspects.  For  example,  not  long 
ago  a  chemist  made  a  most  careful  analysis  of  some  sugar 
beets  grown  in  a  given  locality.  He  found  the  sugar  content 
normal,  and  proceeded  to  draw  the  conclusion  that  sugar  beets 
could  be  grown  profitably  in  that  part  of  the  state,  without 
giving  any  consideration  to  the  quantities  produced  per  acre, 
the  cost  of  producing  the  beets,  the  cost  of  marketing  the  crop, 
the  difficulty  of  securing  labor,  the  relative  profitableness  of 
beets  and  other  crops  which  would  require  labor  at  the  same 
time  of  year,  to  say  nothing  of  the  tariff  in  its  relation  to  the 
sugar  industry.  The  farmers  wanted  an  answer  to  the  question 
"  Will  it  pay  us  to  grow  sugar  beets  ?  "  The  chemist's  work  was 
a  part,  but  only  a  part,  of  the  scientific  work  required  to  answer 
the  question,  but  to  meet  the  demand  for  an  answer,  the  wrong 
answer  was  given. 


AGRICULTURAL  ECONOMICS  DEFINED  AND   DESCRIBED      9 

Bulletins  of  this  character  have  brought  home,  to  the  men 
in  charge  of  experiment  stations,  the  truth  that  every  problem 
is  many-sided  and  that  no  experiment  station  results  are  ready 
for  the  farmer  until  the  many  sides  have  been  studied  by  the 
many  specialists  with  the  requisite,  preparation,  and  the  results 
welded  together  into  a  harmonious  statement  of  the  whole  truth 
about  the  question  so  far  as  it  can  be  obtained. 

The  lack  of  this  rounding  out  process  means  the  issuing  of 
half  truths,  and  it  is  the  issuing  of  half  truths  that  has  done  much 
to  discredit  the  experiment  stations  and  to  make  farmers  look 
upon  scientific  farming  as  proper  fun  for  men  of  fortune,  but  poor 
business  for  farmers. 

It  is  in  the  circle  with  the  other  scientists  specializing  in 
agriculture,  devoting  himself  to  the  economic  forces  which  in- 
fluence the  farmer,  that  the  economist  is  finding  a  place.  While 
economics  deals  with  but  one  of  the  main  groups  of  forces  operat- 
ing in  the  farmer's  environment,  yet  it  practically  becomes  the 
actively  guiding  science  underlying  farm  management  for  the 
reason  that  while  the  functioning  of  physical  and  biological 
forces  change  but  little  from  generation  to  generation,  the 
resultants  of  economic  forces  are  ever  shifting,  and  it  is  neces- 
sary for  the  farmer  constantly  to  watch  the  shifting  of  economic 
conditions  ;  that  is,  the  shifting  of  costs  and  prices,  with  a  view 
to  reorganizing  his  operations  from  time  to  time  to  fit  the  new 
conditions. 

It  is  perhaps  for  this  reason  that  some  writers  have  used  the 
term  farm  management  to  describe  this  field  of  research  and 
education,  which  we  here  call  "agricultural  economics."  This 
usage  has  the  advantage  of  carrying  some  meaning  to  the  mind 
untrained  in  economic  terminology,  but  has  the  disadvantage 
of  including  much  that  is  taught  in  other  branches  of  agricul- 
tural education,  and  failing  to  convey  any  new  and  significant 
meaning.  Literally  "  farm  management  "  is  the  art  of  manag- 
ing a  farm.  To  manage  a  farm  intelligently  the  operator 
should  have  a  clear  understanding  of  all  the  forces  which  in 
any  way  affect  the  results  of  his  actions.  Some  of  these  forces 
are  physical  and  are  dealt  with  by  the  chemist,  the  physicist, 


lO  AGRICULTURAL  ECONOMICS 

the  geologist,  the  specialist  on  soils,  or  the  climatologist ;  other 
forces  are  biological  and  are  dealt  with  by  the  plant  and  animal 
physiologist,  the  entomologist,  the  pathologist,  the  geneticist,  or 
the  bacteriologist.  A  third  class  of  forces  which  have  much  to 
do  in  determining  what  the  farmer  should  do  are  social,  that  is, 
they  are  inherent  in  the  relations  arising  among  men  because 
of  the  pursuit  of  farming  as  a  means  of  making  a  living.  These 
are  called  economic  forces.  Each  of  these  sets  of  forces  should 
be  handled  by  specialists  in  modern  institutions  of  education 
and  research.  If,  therefore,  the  term  "  farm  management  "  is 
preferred,  it  would  be  well  to  designate  the  particular  phase  of 
the  subject.  For  example,  one  may  properly  speak  of  the 
chemistry  of  farm  management,  the  physics  of  farm  manage- 
ment, the  biology  of  farm  management,  and  the  economics  of 
farm  management,  in  which  it  will  be  noted  that  the  term 
"  agriculture  "  as  commonly  used  is  simply  replaced  with  the 
somewhat  narrower  expression  "  farm  management."  The  so- 
lution of  this  problem  of  terminology  may  be  to  adopt  the 
term  *'  farm  economics  "  as  being  both  simple  and  scientifically 
correct. 

The  Report  of  the  Committee  on  Courses  of  Study  of  the 
American  Association  of  Agricultural  Colleges  and  Experiment 
Stations  in  191 1  throws  further  light  upon  this  subject.  "  The 
subject  taught  or  investigated  under  the  head  of  farm  manage- 
ment, as  related  to  the  organization  and  management  of  indi- 
vidual estates  devoted  to  agriculture  in  the  judgment  of  this 
committee  necessarily  involves  the  application  of  the  prin- 
ciples of  economics.  These  principles  constitute  the  scientific 
basis  of  farm  management  and  give  this  subject  its  only  just 
claim  for  consideration  as  having  a  pedagogical  value  entitling 
it  to  a  place  in  courses  of  study  or  a  scientific  standing  as  related 
to  problems  of  investigation. 

"  It  is  true  that  the  farm  manager  should  take  into  account 
what  is  taught  under  agronomy,  animal  husbandry,  agrotechny, 
and  rural  engineering,  but  he  is  chiefly  and  essentially  concerned 
with  the  application  of  economic  principles  to  the  conduct  of 
his  business;    outside  of  economics  there  is  nothing  which 


AGRICULTURAL  ECONOMICS  DEFINED  AND  DESCRIBED      II 

can  give  his  business  a  sound  scientific  basis.  The  mere  col- 
lection of  the  details  of  methods  of  conducting  different  farms 
will  not  sufi&ce.  There  must  be  the  reference  of  these  matters 
to  some  underlying  principles.  When  this  is  done  it  is  clear  that 
farm  management  comes  within  the  domain  of  economics  be- 
cause the  purpose  of  farming  is  to  secure  a  profit  from  the  use 
of  the  land  and  its  equipment.  If  profit  is  lost  sight  of,  the 
farm  manager,  though  trained  in  all  branches  of  farm  practice, 
is  doomed  to  failure." 

For  practical  purposes  farm  economics  may  be  divided  into 
the  economics  of  production,  the  economics  of  marketing,  and 
the  problem  of  maintaining  and  improving  the  economic  and 
social  position  of  the  farmer. 

The  economics  of  production  centers  upon  the  choice  of 
crops  and  live  stock  enterprises,  the  choice  and  organization  of 
the  instruments  of  production,  and  the  principles  which  under- 
lie economy  in  the  operation  of  the  farm  with  a  view  to  optimum 
results.  The  economics  of  marketing  treats  of  the  actual 
movement  of  produce  from  producers  to  consumers,  the  pro- 
cesses involved,  the  middleman  services  rendered,  the  fairness 
of  the  charge  made  for  the  middleman  service,  and  methods  of 
estabhshing  economy  and  justice  in  these  distributive  processes 
through  education,  cooperation,  and  government  activity  or 
regulation.  The  problem  of  maintaining  and  improving  the 
economic  condition  of  the  farmer  centers  upon  those  dynamic 
forces  which  are  gradually  bringing  about  changes  in  the  farmers' 
economic  well-being  as  shown  in  the  ownership  of  property, 
the  standard  of  living,  etc. 

All  three  of  these  phases  of  farm  economics  should  be  viewed 
from  the  standpoint  of  the  individual  farmer  who  desires  maxi- 
mum returns  for  what  he  puts  into  farming  operations  and  also 
from  the  standpoint  of  the  statesman  who  desires  maximum 
well-being  for  the  nation  as  a  whole.  The  individual  interest 
may  conform  in  the  main  to  the  common  interest,  but  where 
this  is  not  true  government  activity  may  be  essential  in  order 
to  estabKsh  harmony  of  interests.  The  individual  point  of  view 
should  be  studied  by  the  farmer  that  he  may  know  his  own 


12  AGRICULTURAL  ECONOMICS 

interest,  and  by  the  statesman  in  order  that  he  understand  the 
forces  he  is  proposing  to  control.  The  national  point  of  view 
should  be  studied  by  the  statesman  in  order  that  he  may  know 
the  extent  to  which  individual  interest  conflicts  with  the  general 
interest  and  in  order  to  know  the  best  means  of  harmonizing 
these  interests  so  far  as  possible.  The  farmer,  as  a  good  citizen, 
should  be  interested  in  the  national  point  of  view  as  well  as  in 
the  individual  point  of  view. 


CHAPTER  n 
ECONOMIC  MOTIVES  AND  IDEALS  IN  AGRICULTURE 

The  primary  motive  which  impels  most  men  who  engage  in 
farming  is  the  desire  for  food,  clothing,  shelter,  and  the  many- 
forms  of  recreation.  The  primary  ideal,  then,  is  to  secure  the 
maximum  results  in  money  or  products  for  direct  use  per  unit 
of  effort  put  forth. 

When  one  studies  man's  motives  and  ideals,  one  finds  a  very 
complex  mixture  of  motives  and  a  great  variety  of  ideals. 
Some  of  these  motives  are  economic,  some  are  social,  some  are 
rational,  some  are  irrational,  some  are  emotional,  some  are 
religious,  and  others  are  legal  in  character.  In  some  instances 
one  class  of  motives  dominates ;  in  other  instances  an  almost 
entirely  different  set  of  motives  will  be  found  to  impel  the 
farmer  to  action. 

I.  The  desire  for  the  means  with  which  to  satisfy  one's  wants. 
In  the  minds  of  many  farmers  the  desire  for  money  stands  out 
as  the  dominant  reason  for  working.  In  some  instances  the 
use  to  which  the  money  is  to  be  put  is  more  or  less  secondary 
in  the  mind  of  the  worker.  The  extreme  case  is  the  miser 
who  wants  money  primarily  to  hoard,  or  with  which  to  buy 
land  for  the  pleasure  of  its  possession.  But  the  more  normal 
form  of  this  economic  motive  is  the  desire  for  money  with  which 
to  buy  food,  clothing,  shelter,  and  various  forms  of  entertain- 
ment. But  even  in  the  single  man  working  for  wages,  this  is 
not  the  sole  factor  in  determining  where  he  will  work  or  how 
well  he  will  work.  There  are  many  direct  satisfactions  which 
often  seem  equally  important.  The  way  in  which  the  employer 
or  his  wife  speaks  to  the  hired  man  may  seem  at  times  more 
important  to  him  than  the  money  which  he  receives.  Personal 
likes  and  dislikes,  therefore,  become  very  important  secondary 

13 


14  AGRICULTURAI.  ECONOMICS 

factors  in  impelling  men  to  action.  But  the  sum  total  of  en- 
joyment to  be  secured  by  the  satisfaction  of  one's  own  individual 
wants  is  relatively  small  compared  with  the  satisfactions  derived 
from  the  larger  relations  of  life. 

2.  The  desire  to  satisfy  the  wants  of  others.  A  motive  of  out- 
standing importance  with  practically  all  the  mature  men  en- 
gaged in  agriculture  is  the  desire  for  a  home  and  a  family.  As 
the  young  man  grows  older,  he  thinks  less  and  less  of  his  own 
immediate  satisfactions  and  more  and  more  of  the  satisfactions 
of  others.     Pope  described  this  change  in  his  "  Essay  on  Man  "  : 

Self-love  but  serves  the  virtuous  mind  to  wake, 
As  the  small  pebble  stirs  the  peaceful  lake ; 
The  center  moved,  a  circle  straight  succeeds ; 
Another  still,  and  still  another  spreads ; 
Friend,  parent,  neighbor,  first  it  wiU  embrace, 
His  country  next,  and  next  aU  human  race. 
Wide  and  more  wide,  th'  o'erflowing  of  the  mind 
Takes  ev'ry  creature  in,  of  ev'ry  kind. 

This  motive  for  home  and  family  may  be  of  the  simplest  in- 
stinctive form,  or  ii  may  take  the  form  of  great  family  pride, 
desire  for  a  large  and  dignified  family  estate,  for  education  for 
the  whole  family,  for  social  standing  in  the  higher  classes  of 
society,  etc.  In  its  higher  forms  this  motive  is  sufficiently 
strong  to  impel  action  throughout  the  whole  lifetime  of  a  man 
without  completely  attaining  the  ideal. 

3.  Pride  in  one^s  work.  Many  a  young  farmer  takes  great 
pride  in  the  straightness  of  his  furrows,  in  the  straightness  of 
his  corn  rows,  in  the  cleanness  of  his  corn  fields,  in  the  high 
production  per  acre  of  all  of  his  crops,  in  the  fine  appearance 
of  his  work  horses,  in  the  high  productivity  of  his  milch  cows, 
and  in  the  general  upkeep  and  tidy  appearance  of  his  farm. 
This  is  an  exceedingly  wholesome  motive  and  not  only  yields 
a  great  amount  of  personal  satisfaction,  but  results  also  in  in- 
creasing agricultural  production  and  maintaining  the  appear- 
ance of  the  countryside. 

4.  The  accumulation  of  landed  property.  This  motive  often 
leads  men  to  strenuous  activity,  when  other  motives  are  rela- 


ECONOMIC  MOTIVES  AND   IDEALS   IN  AGRICULTURE      15 

tively  ineffective.  The  writer  once  knew  a  man  who  had 
followed  this  motive  to  the  extreme  of  acquiring  land  to  the 
extent  of  about  2000  acres,  but  his  farm  presented  a  very 
shabby  appearance,  and  none  of  his  land  was  handled  accord- 
ing to  the  rules  of  good  husbandry.  When  asked  by  what 
method  he  was  able  to  accumulate  so  much  wealth  he  said, 
"  It  is  not  what  you  make  but  what  you  save  that  counts." 
The  personal  appearance  of  the  farmer  as  well  as  that  of  his 
farm  showed  the  stultifying  effect  of  putting  the  accumulation 
of  wealth  ahead  of  living  a  satisfactory  life. 

5.  Joy  in  work.  Many  a  farmer  enjoys  driving  a  team, 
watching  the  clean  soil  turned  over  by  the  plow,  watching  the 
crops  grow,  and  caring  for  live  stock.  So  satisfying  is  this  life 
to  many  a  man  that  he  will  continue  his  activities  as  a  farmer 
year  after  year,  even  though  he  knows  that  men  in  other  occupa- 
tions are  winning  very  much  more  money  than  he,  for  he  is 
wise  enough  to  recognize  that  he  is  paid  in  direct  satisfactions 
as  well  as  in  money,  and  that  much  of  the  richness  of  his  Ufe  is 
due  to  things  which  money  cannot  buy. 

6.  Habit.  With  many  an  unthinking  farmer,  habit  is  the 
substitute  for  conscious  motives.  Because  he  was  trained  to 
do  farm  work,  he  continues  to  do  the  work  in  the  same  way  and 
in  about  the  same  amount  year  after  year,  and  this  often  con- 
tinues long  after  he  has  acquired  a  competence.  Habit  may  or 
may  not  be  a  good  substitute  for  conscious  motives.  Where 
by  habit  one  follows  the  higher  types  of  farming  the  results 
may  be  as  good  as  if  conscious  motives  were  in  operation,  but 
with  the  progress  of  agriculture,  farming  by  habit  will  ever  be 
lagging  behind,  and  for  this  reason  it  will  usually  be  true  that 
the  man  with  conscious  motives  will  be  far  ahead  of  the  man 
who  works  as  a  result  of  habit. 

7.  The  desire  for  ease  and  time  for  enjoyment.  In  that  com- 
plex set  of  motives  which  dominate  the  life  of  man  are  found 
those  which  retard  his  economic  activities  as  well  as  those 
which  promote  productive  work.  This  motive  is  illustrated 
in  the  laborers  of  certain  races  who  quit  work  for  the  remainder 
of  the  week  so  soon  as  they  have  earned  enough  to  support  them 


l6  AGRICULTURAL  ECONOMICS 

one  week.  It  has  been  said  that  in  recent  years  the  laborers 
in  Porto  Rico  and  many  negroes  in  the  southern  part  of  the 
United  States,  as  a  result  of  higher  wages,  knock  off  as  early  as 
Thursday  noon  when  previously  with  a  lower  wage  rate  they 
worked  until  Saturday  noon.  Thus,  it  would  seem  that  the 
economic  motive  is  strictly  limited,  and  that  an  increase  in 
wages  instead  of  increasing  the  labor  supply  may  sometimes 
reduce  the  labor  supply.  Another  illustration  of  this  same  char- 
acter is  found  in  the  farmer  who  retires  in  the  prime  of  life 
because  he  has  accumulated  a  competence.  Thus,  as  the  man 
of  lower  civilization  works  part  of  a  week  in  order  that  he  may 
earn  enough  to  live  a  week,  so  the  retiring  farmer  of  this  type 
works  only  part  of  a  Hfetime  in  order  that  he  may  have  enough 
to  live  upon  for  a  lifetime.  We  have  here  essentially  the  same 
motive,  the  difference  being  that  the  latter  has  a  longer-time 
point  of  view. 

8.  Patriotism  and  community  spirit  as  motives.  In  times  of 
great  national  stress  and  great  need  of  agricultural  products 
many  a  farmer  will  work  longer  hours  and  more  strenuously  than 
he  otherwise  would  because  he  feels  it  his  duty  to  farm  more 
and  farm  better  in  order  that  he  may  in  this  way  contribute  to 
the  national  welfare.  It  is  also  true  that  many  a  man  takes 
great  pride  in  the  standing  of  the  agriculture  of  his  native  state 
and  is  willing  to  do  many  things  to  promote  the  interests  of 
agriculture  not  only  for  his  own  benefit,  but  for  the  benefit 
of  all  the  farmers  of  the  state.  Then,  again,  the  community  is 
sometimes  the  geographic  limit  of  a  spirit  of  mutual  helpful- 
ness. A  community  spirit  may  become  established  which 
makes  every  one  desire  that  his  community  shall  be  known 
for  its  fine-appearing  farms  and  the  quality  of  its  products. 
More  might  be  done  in  the  way  of  stimulating  community 
spirit.  Public  opinion  developed  by  community  leaders  might 
be  a  means  of  getting  more  farmers  to  destroy  the  noxious  weeds 
which  are  spreading  from  farm  to  farm  and  which  one  man  can- 
not eradicate  from  his  farm  unless  his  neighbors  attempt  to  do 
likewise.  It  is  hard  to  say  to  what  extent  public  opinion  forces 
men  to  be  patriotic  and  public-spirited  in  their  actions,  and  to 


ECONOMIC   MOTIVES   AND    IDEALS   IN  AGRICULTURE      l^ 

what  extent  this  action  arises  from  the  independent  character 
of  the  man ;  but  in  either  case  it  is  effective. 

9.  Legal  compulsion.  The  activity  of  many  farmers  is  in- 
fluenced by  legal  compulsion.  For  instance,  the  law  requires 
that  milk  sold  in  cities  shall  contain  a  minimum  percentage  of 
fat.  It  prescribes  the  maximum  number  of  bacteria  and  the 
maximum  amount  of  dirt  which  can  be  sold  with  the  milk. 
It  also  prescribes  the  kinds  of  weeds  which  must  be  destroyed 
before  seeding  and  in  many  ways  regulates  the  live  stock  in- 
dustry. To  the  extent  that  the  farmer  possesses  right  motives, 
legal  compulsion  is  unnecessary,  but  there  are  usually  some  in 
every  community  who  would  not  live  up  to  the  standards  laid 
down  by  law  if  it  were  not  for  the  necessity  of  doing  so. 

10.  Religion  and  the  idea  of  duty.  In  the  minds  of  many 
farmers  the  religious  motive  to  action  is  a  very  important  one. 
There  are  farmers  who  look  upon  themselves  as  stewards  of  the 
property  they  possess  and  feel  that  it  is  their  duty  to  handle 
their  property  to  the  advancement  of  religious  ideals.  There  are 
very  many  who  are  much  influenced  in  their  deaUngs  with  other 
men  by  the  ideas  of  right  and  wrong  which  have  been  established 
by  rehgious  teaching.  ReHgious  ideas  with  respect  to  the  keep- 
ing of  the  first  day  of  the  week  as  a  day  of  rest  and  religious 
education,  as  well  as  the  keeping  of  various  religious  holidays, 
may  to  some  extent  limit  the  amount  of  time  devoted  to  agricul- 
tural production  and  increase  the  amount  of  time  devoted  to 
self-improvement  and  to  the  direct  satisfactions  of  life.  It  is 
probable  that  if  farmers  as  a  class  should  cease  to  observe 
Sunday  as  a  day  of  rest  and  religious  activity  and  devote  seven 
days  in  the  week  to  farm  work,  they  would  get  no  more  pay  for 
the  seven  days  than  they  are  getting  for  the  six.  It  seems  to 
be  true  that  city  workmen  are  getting  as  much  pay  for  a  shorter 
day  as  they  formerly  did  for  a  longer  day. 

With  this  complex  set  of  motives  in  operation,  it  is  certain 
that  maximum  net  return  in  money  and  in  products  for  direct 
consumption,  primary  though  it  be,  is  too  limited  an  ideal  for 
the  farmer. 

In  the  mind  of  the  high-class  young  farmer,  a  life  for  him- 
c 


l8  AGRICULTURAL  ECONOMICS 

self  and  his  family,  in  accordance  with  a  high  standard  of  com- 
fort, and  right  relations  in  the  community,  will  give  purpose 
and  force  to  the  primary  economic  motive  and  hold  it  in  its 
right  position  as  a  means  to  an  end,  but  not  as  an  end  in  itself. 
With  the  passing  years,  and  the  accompanying  accumulation 
of  wealth,  the  primary  motives  weaken,  and  the  higher  motives 
come  more  and  more  to  dominate.  Without  the  desire  to  render 
service  to  others,  there  is  danger  that  the  latter  part  of  a  man's 
life  may  be  wasted ;  but  with  this  motive  ever  strengthening, 
man  may  continue  action. 

The  hired  man  may  well  have  the  motive  of  economic  gain  to 
stimulate  him  to  earn  and  accumulate  wealth  and  to  strive  to 
improve  his  ability  in  order  that  he  may  chmb  to  the  position  of 
a  tenant  farmer,  where  he  can  safely  assume  the  responsibility 
of  a  family.  For  the  tenant  farmer,  to  achieve  a  comfortable 
living  and  accumulate  funds  with  which  to  buy  a  farm,  and 
to  be  well  thought  of  in  his  community,  is  a  praiseworthy 
ideal.  Later  the  education  of  the  family  and  the  improvement 
of  the  farm  should  be  supplemented  with  some  community 
service.  The  critical  moment  comes  when  the  farm  is  improved 
and  paid  for.  Unless  the  higher  ideal  of  service  to  others 
comes  into  the  foreground,  there  is  danger  of  inactivity  just  at 
the  time  when  the  farmer  has  the  capital  to  farm  in  the  proper 
manner,  and  just  at  the  time  when  he  is  most  worth  while  as 
a  community  leader,  both  in  economic,  social,  and  educational 
work. 

Stimulating  the  higher  motives.  Much  can  be  done  to 
stimulate  in  men  the  desire  to  be  of  service  to  their  fellow  men 
by  farming  well  and  living  in  right  relations  with  their  com- 
munity. The  "  Honorary  Recognition  "  given  to  farmers  by 
the  University  of  Wisconsin  for  unusual  service  in  some  branch 
of  agricultural  or  country  life  work  is  intended  to  stimulate 
the  higher  motives  in  others.  The  Pennsylvania  Railroad 
Company  publishes  a  leaflet  entitled  "  Information  for  Em- 
ployees and  the  Public  "  which  stimulates  the  higher  motives 
of  the  men  in  its  employ.  The  pictures  and  Ufe  sketches  of 
the  men  who  have  been  trustworthy  and  pubhc-spirited  in 


ECONOMIC   MOTIVES  AND   IDEALS   IN   AGRICULTURE      19 

their  work  are  printed  by  this  company  and  put  into  the  hands 
of  all  the  employees.  The  local  leaders  in  rural  communities, 
and  extension  workers,  agricultural  papers,  and  every  other 
educational  agency  touching  rural  life  should  give  due  em- 
phasis to  the  broader  and  higher  motives  on  the  theory  that 
"  What  is  honored  is  cultivated." 

This  sketch  of  the  complex  motives  which  impel  the  farmers 
to  action  prepares  the  way  for  an  understanding  between 
the  reader  and  the  author  on  one  important  question  which 
must  be  agreed  upon  if  the  reader  is  to  benefit  from  the  follow- 
ing discussions.  The  purpose  of  the  author  is  not  to  explain 
how  men  will  act  under  given  conditions.  The  motives  of  men 
are  too  complex  and  too  varied  for  this.  What  is  attempted  is 
to  show  what  it  is  the  economic  interest  of  the  farmer  to  do 
under  given  conditions.  To  the  extent  that  this  can  be  done, 
the  principles  of  farm  economics  will  prove  a  guide  to  the 
farmer  in  organizing  and  operating  his  farm,  and  to  the  states- 
man who  seeks  to  improve  agricultural  conditions. 


CHAPTER  III 
DEVELOPMENT   OF  THE  FARMER'S  ECONOMIC  PROBLEM 

There  was  a  time  when  each  farm  family  or  each  small 
community  tried  to  produce  for  itself  all  the  food,  clothing, 
and  shelter  necessary  to  its  well-being,  —  each  family  carried 
on  both  agriculture  and  manufactures.  This  was  the  ideal  in 
western  Europe  in  the  middle  ages  and  it  has  not  been  long 
since  it  was  a  necessity  with  the  pioneer  farmer  in  America. 

The  beginners  of  American  agriculture  were  EngHshmen,  and 
the  course  which  they  first  took  in  the  New  World  was  greatly 
influenced  by  the  stage  of  industrial  progress  with  which  they 
were  famihar  at  home.  In  the  seventeenth  century,  the  greater 
part  of  the  land  in  England  was  divided  into  small  hold- 
ings cultivated  by  tenants  or  by  landowning  farmers  who 
looked  primarily  to  the  production  of  such  crops  as  were  needed 
in  their  own  households.  In  some  parts  of  the  country,  how- 
ever, the  organization  of  agriculture  had  taken  on  a  very 
different  form.  Large  areas  of  land  in  the  southeastern  part 
of  England  had  been  made  into  sheep  farms  on  which  wool  was 
produced  primarily  for  the  market. 

Thus  in  the  seventeenth  century,  England  had  two  types  of 
farmers.  The  peasant  farmer  was  a  hard-working,  painstaking 
tiller  of  the  soil  who  was  able  to  live  "  unto  himself."  The  wool 
and  flax  which  were  grown  on  his  little  farm  were  manufactured 
by  the  farmer  and  his  family  into  the  various  articles  which  were 
desired  for  home  consumption.  The  peasant's  house  was  usu- 
ally of  simple  construction,  such  as  the  farmer  could  make  for 
himself  out  of  such  materials  as  could  be  found  in  the  immediate 
neighborhood.  Cottages  made  of  mud  and  straw  were  very 
common  in  the  central  and  northern  counties.     This  farmer 


DEVELOPMENT  OF   FARMER'S  ECONOMIC   PROBLEM      21 

was  just  the  kind  to  succeed  in  a  new  country  where  commerce 
could  not  be  counted  upon  to  supply  such  stores  of  goods  as 
the  wants  of  men  demand. 

The  second  class  of  English  farmers  had  been  in  the  habit  of 
producing  primarily  for  the  market,  and  depending  upon  the 
market  for  the  supplies  of  clothing,  luxuries,  etc.,  which  it  was 
their  desire  to  consume.  They  had  passed  on  to  that  stage  in  the 
evolution  of  industrial  society  where  the  commercial  side  of 
their  agriculture  dominated,  and  without  a  market  they  could 
not  well  survive.  Having  before  our  minds  these  two  classes 
of  EngHsh  farmers,  let  us  next  take  a  glance  at  the  country 
which  they  were  to  occupy. 

The  new  country  provided  new  crops,  such  as  maize,  potatoes, 
and  tobacco,  the  culture  of  which  could  be  learned  from  the 
Indians.  The  climate  of  the  eastern  coast  of  America  is  very 
different  from  that  of  England,  and  much  colder  in  winter  than 
the  settlers  may  have  expected  to  find  in  a  latitude  so  much  south 
of  their  mother  country.  The  Atlantic  coast  presents  two  very 
different  areas :  tidewater  Virginia,  with  her  mild  climate, 
rich  soil,  and  slow-flowing  rivers  which  were  well  suited  for 
becoming  the  arteries  of  commerce ;  and  New  England,  with 
her  more  severe  climate,  her  poorer  soil  and  rough  surface 
traversed  by  swift-flowing  streams  which  did  not  lend  them- 
selves readily  to  the  purposes  of  transportation. 

Both  of  these  classes  of  English  farmers  came  to  America. 
The  first  class,  the  self-sufficing  farmers,  got  along  well  in  New 
England.  They  learned  to  grow  maize  and  potatoes.  They 
found  plenty  of  fish  in  the  streams.  Their  old  habits  of  build- 
ing houses  for  themselves,  manufacturing  their  own  clothing, 
and  producing  and  preparing  for  winter's  use  abundant  sup- 
plies of  food,  made  them  the  natural  inhabitants  of  the  isolated 
New  England  of  that  time. 

But  the  commercial  farmers  were  not  so  successful  in  the 
North  as  were  their  less  pretentious  fellow  countrymen.  They 
sought  diligently  for  some  agricultural  product  which  could  be 
transported  to  London  with  profit;  for  it  was  from  London 
that  they  could  draw  the  comforts  and  luxuries  which  they  had 


22  AGRICULTURAL  ECONOMICS 

learned  to  consume,  but  which  they  were  unable,  themselves, 
to  produce.  As  it  was  unprofitable  in  those  early  days  to  ship 
grain  to  London  except  in  years  when  the  price  was  abnormally 
high,  and  as  no  staple  was  found  which  would  bear  shipment 
to  Europe,  commercial  agriculture  was  unable  to  play  an  im- 
portant role  in  New  England. 

In  the  South,  the  commercial  farmer  met  with  better  success. 
There,  as  in  New  England,  a  thorough  search  was  made  for  a 
staple  which  would  form  the  basis  of  a  profitable  system  of 
commercial  agriculture.  The  production  of  silk  was  attempted, 
but  with  little  or  no  success.  Wine  was  looked  to  as  a  possible 
solution  of  the  problem,  but  this,  too,  led  only  to  disappoint- 
ment. Tobacco  was  tried  with  success  in  the  southern  colonies, 
and  the  South  was  launched  upon  a  career  of  her  own.  To- 
bacco had  become  fashionable  in  England,  and  commanded  a 
high  price.  This  was  the  opportunity  of  the  commercial 
farmers.  They  could  produce  tobacco  and  send  it  by  the  cargo 
directly  from  the  river  wharves  on  their  own  plantations  to 
the  markets  of  London.  This  enabled  them  to  order  what- 
ever they  pleased  from  the  merchants  of  Europe. 

The  labor  problem  arose.  Free  white  men  could  do  better 
working  for  themselves  in  a  country  where  rich  soil  was  to  be 
had  for  the  taking.  Contract  labor  was  resorted  to,  but  this 
did  not  satisfy  the  demand.  The  African  negro  was  introduced 
to  supply  the  tobacco  plantations  with  the  desired  number  of 
laborers.  And  thus,  it  was  tobacco  and  slaves  that  made  com- 
mercial agriculture  possible  and  profitable  to  the  farmers  of 
the  South  and  made  possible  the  successful  operation  of  the 
large  plantations  of  Virginia,  which  were  comparable  in  size 
and  dignity  to  some  of  the  estates  of  the  country  gentlemen  of 
England.  The  small  farmers  were,  sooner  or  later,  crowded 
out  of  the  fertile  lands  conveniently  accessible  to  water  trans- 
portation in  tidewater  Virginia.  Plantation  agriculture  based 
on  tobacco,  rice,  and  cotton  dominated  the  South,  and  it  is 
the  conditions  w^hich  have  grown  out  of  slavery  and  the  planta- 
tion system  which  provide  the  leading  problems  of  Southern 
agriculture  to-day. 


DEVELOPMENT  OF  FARMER'S  ECONOMIC  PROBLEM      23 

In  the  North  the  self-sufficing  economy  remained  important 
for  a  long  time.  Small  farmers  from  New  England,  New  York, 
and  Pennsylvania  gradually  moved  westward,  and  it  was  the 
same  conditions  which  made  them  successful  in  the  early  settle- 
ment of  the  North  that  fitted  them  for  the  life  of  the  pioneer. 
Since  the  days  of  railways,  new  countries  can  be  settled  success- 
fully by  commercial  farmers,  but  it  was  only  yesterday  that 
the  self-sufficing  pioneer  ceased  to  be  an  important  factor  in  the 
development  of  the  resources  of  the  United  States. 

The  self-sufficing  pioneer  farmer  was  free  from  the  power  of 
trusts  and  corporations,  but  his  life  was  full  of  hardships  such 
as  few  farmers  would  now  wilhngly  endure.  The  following 
quotation,  descriptive  of  the  life  of  a  pioneer  family  during 
their  first  year  in  their  new  home  in  western  Pennsylvania,  in 
1773,  sets  forth  the  hardships  of  these  pioneers  in  a  ver>'-  pa- 
thetic manner.  "  For  six  weeks  we  had  to  live  without  bread. 
The  lean  venison  and  the  breast  of  the  wild  turkey  we  were 
taught  to  call  bread.  The  flesh  of  the  bear  was  denominated 
meat.  This  artifice  did  not  succeed  very  well.  After  Hving 
in  this  way  for  some  time  we  became  sickly,  the  stomach  seemed 
to  be  always  empty,  and  tormented  with  a  sense  of  hunger. 
I  remember  how  narrowly  the  children  watched  the  growth  of 
the  potato  tops,  pumpkin  and  squash  vines,  hoping  from  day 
to  day  to  get  something  to  answer  in  the  place  of  bread.  How 
dehcious  was  the  taste  of  the  young  potatoes  when  we  got  them  ! 
What  a  jubilee  when  we  were  permitted  to  pull  the  young  corn 
for  roasting  ears.  Still  more  so  when  it  had  acquired  sufficient 
hardness  to  be  made  into  johnnycakes  by  the  aid  of  a  tin 
grater."  ^ 

The  agriculture  of  the  North  has  gradually  been  transformed 
until  now  the  commercial  element  dominates.  Manufacturing 
was  for  a  long  time  a  household  industry  carried  on  by  nearly 
every  farm  family,  but  in  the  course  of  time  more  and  more 
of  this  work  was  turned  over  to  those  who  made  a  specialty 
of  manufactures.  The  swift  streams  of  New  England  were 
harnessed   and  made  to  turn  the  wheels  of  industry.     This 

1  Rev.  Jos.  Doddridge,  Haxt's  "American  History,"  Vol.  II,  p.  387. 


24  AGRICULTURAL  ECONOMICS 

movement  followed  but  slowly  the  path  of  the  pioneer  farmer, 
yet  in  the  course  of  time  the  older  parts  of  the  North  became 
noted  for  their  manufactures.  With  the  development  of 
manufactures,  a  market  has  grown  up  for  the  ordinary  forms  of 
farm  produce,  such  as  wheat,  oats,  pork,  beef,  and  dairy  prod- 
ucts. As  markets  have  developed  and  the  means  of  transpor- 
tation have  been  improved,  the  old  self-sufficient  farming  has 
been  changed  into  a  commercial  economy,  until  the  remnants 
only,  of  the  old  system,  are  now  to  be  found.  This  change  has 
come  about  because  men  have  found  that  a  given  amount  of 
economic  activity  will  produce  the  means  of  satisfying  a  greater 
number  of  wants  when  each  man  devotes  himself  more  or  less 
exclusively  to  some  one  line  of  production.  This  specializa- 
tion in  production  brings  larger  returns  because  (i)  some  parts 
of  the  world  are  especially  well  suited  for  the  production  of  cer- 
tain products,  (2)  some  men  are  especially  well  fitted  for  per- 
forming one  kind  of  work  while  others  can  best  do  something 
else,  and  (3)  since  the  invention  of  power  machines  in  manu- 
factures large  scale  specialized  production  is  much  cheaper 
than  the  old  handicraft  system. 

As  a  result  of  the  development  of  commerce  in  the  products 
of  agriculture,  the  modern  farmer  has  found  it  profitable  to 
look  primarily  to  the  production  of  a  few  staples  which  can  be 
put  upon  the  market  in  exchange  for  the  great  variety  of  things 
which  he  desires  to  use.  Incidentally  many  modern  farmers 
produce  certain  articles,  such  as  fruits  and  vegetables,  primarily 
for  the  use  of  their  own  households,  and  here  they  are  free  to 
follow  their  own  instincts,  as  did  the  self-sufficing  farmers  of 
olden  times,  and  produce  those  things  which  they  like  best  to 
consume ;  but  in  the  production  of  the  staples  of  commerce 
they  must,  if  they  would  best  succeed,  produce  those  things 
which  will  enable  them  to  obtain  upon  the  market  the  largest 
possible  means  of  supplying  their  wants,  in  return  for  the  effort 
which  they  expend  upon  their  farms. 

From  the  point  of  view  of  the  farmer,  then,  the  first  problem 
before  us  in  the  economics  of  agriculture  pertains  to  the  selec- 
tion of  land  and  the  management  of  a  farm  in  such  a  manner  as 


DEVELOPMENT  OF   FARMER'S  ECONOMIC  PROBLEAI      25 

will  enable  the  farmer,  one  year  with  another,  to  win  the  largest 
net  profits.  For  example,  if  a  farmer  is  operating  land  in  a  given 
community  he  should  endeavor  to  determine  which  grade  of 
land  to  cultivate,  which  kinds  of  crops  to  grow,  how  intensely 
the  land  should  be  cultivated  in  the  case  of  each  crop,  and  how 
large  a  farm  he  should  attempt  to  operate  in  order  that,  after 
he  has  counted  out  the  rent  of  the  land  (or  the  interest  on  the 
value  of  the  land,  the  taxes,  and  the  cost  of  repairs,  etc.,  if  he 
owns  the  land),  the  expense  (in  the  forms  of  interest  and  wear 
and  tear)  to  which  he  has  been  put  for  the  use  of  equipments, 
that  is  for  the  use  of  capital  goods,  and  the  cost  of  hired  labor, 
the  total  net  profit  which  is  left  to  him  and  his  family  in  return  for 
their  own  labor,  skill,  and  enterprise  shall  be  as  large  as  possible. 

From  the  standpoint  of  economy  in  production,  commercial 
agriculture  is,  without  question,  far  superior  to  the  old  self- 
sufficing  system,  for  it  undoubtedly  enables  the  farmers  to  win 
a  large  net  profit ;  but  from  the  standpoint  of  justice  in  distri- 
bution, the  commercial  system  has  been  challenged,  and  there 
is  unquestionably  a  chance  for  improvement  in  this  regard. 
It  is  believed  by  many  that  when  a  given  farmer  puts  forth  a 
certain  amount  of  labor  and  capital  in  the  production  of  goods 
which  he  sells  upon  the  market  for  one  hundred  dollars  and  then 
invests  in  the  various  articles  which  he  wishes  to  consume, 
it  will  be  found  that  the  commodities  which  he  is  taking  home 
in  return  for  his  products  were  produced  by  much  less  labor 
and  capital  than  the  amount  which  he  expended  upon  the  com- 
modities which  he  took  to  the  market.  Certainly  where  such  a 
condition  exists  it  is  an  injustice  to  the  farmer,  even  though  the 
articles  which  he  received  in  this  way  would  satisfy  many 
more  wants  than  he  could  hope  to  satisfy  if  he  tried  to  produce 
for  himself  every  article  which  he  consumes. 

It  has  been  alleged  that  there  are  men  who  do  no  work,  but 
simply  sit  at  certain  points  where  exchanges  are  made  and 
demand  that  their  baskets  be  filled.  To  avoid  this  alleged 
injustice  in  the  distribution  of  wealth,  it  has  been  proposed 
that  "  Farming  Corporations  "  be  organized,  and  that  these 
corporations  make  it  their  business  to  produce  for  themselves 


26  AGRICULTURAL  ECONOMICS 

everything  they  want  to  use.  It  is  proposed  that  no  attention 
shall  be  paid  to  the  commercial  world  nor  to  commercial  values, 
but  simply  to  the  wants  of  the  farmers  and  their  famihes. 
Every  kind  of  agricultural  product  wliich  may  be  desired  for 
use  by  the  members  of  this  corporation  is  to  be  produced  by 
them.  Wool  is  to  be  produced  and  converted  into  clothing, 
beef  is  to  be  produced  for  home  use,  and  the  hides  of  the  animals 
converted  into  shoes  for  home  use.  Thus  to  avoid  unjust 
treatment  it  is  proposed  to  throw  away  many  of  the  advantages 
of  the  commercial  system  and  revert  the  old  self-sufficing  system 
in  agricultural  production.^ 

L.  H.  Kerrick,  who  lived  at  Bloomington,  Illinois,  and  who 
was  in  his  Hfetime  a  leading  and  successful  farmer  of  that  state, 
delivered  an  address  at  the  Iowa  Agricultural  College,  Ames, 
Iowa,  a  few  years  ago,  in  which  he  said  in  part : 

"The  fanner  has,  in  my  region  certainly,  become  too  much  im- 
bued with  the  spirit  of  commercialism.  He  has  gone  too  far,  I 
think,  in  the  way  of  producing  things  to  'sell.'  He  raises  big  crops 
of  corn  and  oats  to  sell,  or  feeds  many  cattle  and  hogs  for  the  market. 
He  sells  these  at  the  other  fellow's  prices.  Then  he  turns  about 
and  buys,  at  the  other  fellow's  prices,  supphes  of  various  kinds  that 
he  might  easily  have  produced  on  his  own  farm.  By  this  practice 
he  puts  himself  twice  in  the  enemy's  hands  —  once  when  he  sells, 
and  again  when  he  buys.  This  is  not  the  highest  and  best  idea  of 
hving  by  farming.  The  first  thing  a  farmer  should  do  is  to  surround 
himself  in  his  farm  home  with  everything  he  can  make  or  produce 
that  will  promote  the  health,  comfort,  safety,  and  pleasure  of  him- 
self and  family.  This  is  what  the  farm  is  for,  first.  And  how  few 
good  and  needful  things  there  be  that  may  not  be  produced  and 
provided  on  a  good  farm  and  in  and  about  a  real  farm  home !  I  do 
not  attempt  to  name  the  innumerable  good  things  of  his  own  garden 
and  orchard  and  field  —  aU  prime,  fresh,  and  exactly  to  his  liking, 
which  the  provident  farmer  may  have  if  he  can  only  get  that  idea  of 
raising  things  to  seU  out  of  his  head  or  at  least  modified,  and  get 
that  other  idea  of  producing  things  on  his  own  farm  for  his  own 
use.  If  farmers  everywhere  would  think  first  and  work  first  to  pro- 
vide for  their  wants  on  their  own  farms,  then  they  might  be  able  to 
set  the  price  on  the  surplus  they  have  to  sell.  Then  the  surplus 
1  Wilber  Aldrich,  Farming  Corporations,  p.  169. 


DEVELOPMENT  OF   FARMER'S   ECONOMIC  PROBLEM      2^ 

would  not  be  so  overwhelming  in  voluxne.  Then  there  might  be 
competition  among  the  buyers  of  his  surplus.  The  consumer  might 
not  then  be  so  able  as  now  to  sit  complacently  waiting  to  be  solicited 
to  buy  this  enormous  surplus  at  his  own  price.  The  railroad  people 
then  might  take  on  better  manners  and  be  willing  to  give  a  more 
nearly  just  rate,  and  they  might  be  more  careful  to  give  good  service. 

"The  farmer  with  the  right  idea  of  farming  and  of  farm  Hfe  and 
of  farm  opportunities  is  the  man  I  have  most  faith  in  to  curb  trusts 
and  corporations  generally  —  such  as  need  curbing. 

"The  makers  of  machines  and  implements  and  of  barbed  wire  and 
of  all  that  sort  of  thing  cannot  eat  their  stuff  —  they  must  sell  to 
get  any  good  out  of  their  product.  They  cannot  live  at  aU  without 
selling.  But  the  right  kind  of  a  farmer  can  live  a  long  time  without 
selling  his  product  —  he  can  eat  it  and  live.  Suppose  the  other 
fellow  asks  you  an  exorbitant  price  for  his  wares.  Just  let  him  keep 
them,  because  he  can't  eat  them;  and  to  get  something  to  eat, 
he  must  sell.  But  you,  my  farmer  friends,  can  keep  yours  a  while 
and  be  living  like  kings  —  eating  your  bread  and  meat  and  good 
apples  and  fresh  butter  and  eggs  and  mUk.  The  other  fellow  can 
only  keep  his  just  a  Uttle  while,  imtU  you  hear  the  prices  of  his  wares 
are  cracking.  The  farmer  is  a  trust  breaker,  if  he  only  knows  it. 
I  have  Httle  faith  in  legislatures  and  courts  and  magazine  writers 
and  orators,  as  trust  breakers.  But  the  farmer  with  the  right  idea, 
as  I  have  been  trying  to  illustrate,  can  fortify  himself  in  his  farm 
home  for  a  much  longer  siege  than  the  manufacturer  or  the  railroad 
manager  can  put  up  against  hun.  And  the  beauty  of  it  all  is,  the 
farmer  can  be  happy  all  the  same,  and  aU  the  time." 

That  too  many  farmers  neglect  to  provide  their  families  with 
the  variety  and  abundance  of  fruits  and  vegetables  which  they 
might  and  should  produce  primarily  for  home  use,  and  that 
they  also  generally  fail  to  appreciate  the  possibility  of  creating 
for  themselves  beautiful  surroundings  by  planting  flowers  and 
shrubs  and  trees,  is  frankly  admitted.  This  condition  of  affairs 
is  to  be  regretted,  and  should  be  remedied.  One  of  the  great- 
est of  economists,  John  Stuart  Mill,  has  said,  "  Solitude  in  the 
presence  of  natural  beauty  and  grandeur  is  the  cradle  of 
thoughts  and  aspirations  which  are  not  only  good  for  the  in- 
dividual, but  which  society  could  ill  do  without."  ^ 

>  "Principles  of  Political  Economy,"  Book  IV,  Chapter  VL 


28  AGRICULTURAL  ECONOMICS 

We  need  more  of  the  "  thoughts  and  aspirations  "  such  as  the 
"  natural  beauty  and  grandeur  "  of  the  ideal  country  home  may 
inspire,  and  it  is  certainly  to  be  hoped  that  the  American  farmer 
will  avail  himself  of  his  natural  opportunities  and  surround  him- 
self with  everything  which  will  add  to  the  dignity  and  beauty  of 
his  home. 

But  if  these  beautiful  surroundings  are  to  be  created  they  must 
first  be  desired  by  the  farmers,  and  it  will  certainly  be  admitted 
that  the  desire  for  food,  clothing,  and  shelter  naturally  and  prop- 
erly come  first  and  should  be  satisfied  before  much  attention 
is  given  to  the  creation  of  beautiful  surroundings ;  and,  again, 
to  enjoy  the  beautiful  surroundings,  one  must  have  leisure,  and 
in  order  to  have  time,  after  satisfying  the  more  urgent  wants, 
to  create  and  enjoy  beautiful  surroundings,  it  is  important  that 
the  farmer  avail  himself  of  the  most  economical  means  of  satisfy- 
ing these  wants.  We  object,  therefore,  to  the  general  principle 
laid  down  by  Mr.  Kerrick,  that  farmers  everywhere  should 
"  think  first  and  work  first  to  provide  for  their  wants  on  their 
own  farms,"  rather  than  look  primarily  to  the  production  of 
those  things  which  will  give  them  the  greatest  purchasing 
power  in  the  market.  We  believe  the  latter  method  to  be  the 
one  which  will  bring  the  largest  means  of  satisfying  wants  for  a 
given  amount  of  exertion,  whereas,  Mr.  Kerrick's  suggestion 
points  towards  a  reversion  to  the  self-sufi&cing  economy  of 
earlier  times,  and  to  a  sacrifice  of  much  of  the  benefit  which  has 
resulted  from  the  extension  of  commerce  and  from  specializa- 
tion in  industry. 

There  are,  doubtless,  many  injustices  in  the  present  complex 
commercial  system  of  agricultural  production ;  but,  in  spite  of 
this  objection,  the  commercial  system  is  superior  to  the  old  self- 
sufficing  economy  which  was  desirable  only  in  an  earlier  stage 
of  economic  society  when  the  dangers  to  commerce  were  so 
very  great  and  the  means  of  transportation  had  been  so  little 
developed  that  the  farmers  could  gain  little  or  nothing  by  pro- 
ducing for  the  market.  Modern  agriculture  is  not  entirely 
commercial,  yet  production  for  the  market  is  the  dominant 
feature.     The  commercial  system  has  replaced  the  self-suffic- 


DEVELOPMENT  OP^   FARMER'S   ECONOMIC   PROBLEM      29 

ing  system  because  it  brings  larger  returns  for  the  efforts  ex- 
pended, and  our  aim  should  be,  not  to  revert  to  a  less  econom- 
ical system  in  order  to  avoid  the  evils  which  have  arisen, 
but  to  remove  the  evils  which  accompany  it  and  thus  perfect 
the  present  commercial  system. 

When  the  farmer  follows  the  rule  of  seeking  the  largest  net 
profits,  he  will  not  be  bound  to  any  one  system,  he  will  produce 
for  home  consumption  just  to  the  extent  that  he  can  do  so 
more  economically  than  to  buy  upon  the  market.  That  which 
is  good  practice  in  this  regard  at  one  time  and  place  may  be 
bad  economy  at  the  same  time  in  another  place,  and  in  the  same 
place  at  another  time. 

Producing  for  the  market  has  made  farm  management  a 
complex  problem.  The  farmer  can  no  longer  look  within  the 
limits  of  his  own  domain  and  find  all  the  information  needed 
for  the  guidance  of  his  husbandry.  If  the  farmer  would  succeed 
he  must  give  heed  to  the  demands  of  millions  of  people,  most 
of  whom  he  does  not  and  cannot  hope  to  know.  He  must  give 
thought  also  to  other  farmers  who  may  be  producing  the  same 
article  for  the  market.  His  knowledge  of  what  other  farmers 
are  doing  is  limited  to  such  statistical  information  as  can  be 
secured  by  public  and  private  bureaus  of  information  regarding 
what  has  recently  been  produced.  Fortunately,  the  farmer 
finds  in  market  prices  the  record  of  the  present  results  of  supply 
and  demand  and  may  use  prices  thoughtfully  studied  through  a 
long  period  as  a  guide  to  his  future  actions.  The  physical  and 
biological  environment  given,  the  prices  of  the  products  and 
the  prices  of  the  agencies  of  production  —  land,  labor,  and 
equipments  —  determine  what  to  produce  and  how  to  produce 
it  in  order  to  secure  maximum  profits. 

The  commercial  economy,  with  its  farm  machinery,  its  eleva- 
tors, its  mills,  its  packing  plants,  its  railway  and  steamship 
lines,  has  made  the  total  labor  of  the  people  much  more  produc- 
tive. Every  one  is  benefited.  Where  some  are  receiving 
more  than  a  fair  share,  a  remedy  must  be  provided  through  such 
control  of  the  marketing  system  as  will  give  a  fair  share  of  the 
proceeds  to  each  one  who  helps  in  their  production,  but  the 


30 


AGRICULTURAL  ECONOMICS 


farmer  should,  so  far  as  possible,  take  advantage  of  the  great 
economy  in  production  due  to  the  commercial  system.  The 
farmer  should  study  his  soil,  his  climate,  his  labor  force,  his 
market,  and  his  costs,  and  adjust  his  farm  operations  in  such  a 
manner  as  will  enable  him  to  win  a  maximum  profit  in  cash  and 
direct  satisfactions. 

The  state  should  so  regulate  the  marketing  system,  especially 
with  regard  to  the  sharing  of  the  consumer's  dollar  among  those 
who  produce  the  goods,  that  the  farmer  will  be  in  a  position  to 
live  as  well  and  save  as  much  from  his  earnings  as  those  of 
similar  ability  with  like  investments  engaged  in  other  occupa- 
tions. If  this  is  not  done,  there  is  danger  that  those  in  other 
occupations  will  gradually  accumulate  wealth,  buy  land,  and 
in  the  course  of  time  make  the  farmers  subject  to  them  as  land- 
lords. The  objective  point  in  agricultural  economics  is  the  well- 
being  of  farmers  as  an  integral  part  of  a  nation.  This  well- 
being  demands  justice  in  distribution  as  well  as  economy  in 
production.  Both  of  these  goals  are  kept  in  mind  as  the 
purposes  in  view  in  the  chapters  which  follow. 


CHAPTER  IV 
ECONOMIC   GOODS   AND   THEIR  VALUATION 

The  purpose  of  farming  is  to  produce  goods  which  are  needed 
directly  or  indirectly  to  satisfy  the  wants  of  man.  Any  material 
thing  or  personal  service  which  directly  or  indirectly  satisfies 
a  human  want  is  called  a  good.  Tobacco  satisfies  a  want, 
hence  it  is  a  good,  in  the  sense  in  which  the  word  is  used  in 
economics.  It  may  seem  like  a  paradox  to  call  a  bad  thing  a 
good ;  but  this  will  be  understood  when  one  bears  in  mind  that 
it  is  economic  qualities  rather  than  moral  qualities  that  are  here 
being  considered.  Goods  satisfy  desires.  Desires  may  be 
moral  or  immoral.  Ruskin  divides  all  goods  into  two  classes, 
those  the  use  of  which  he  approves  he  calls  wealth,  those  the 
use  of  which  he  disapproves,  because  he  thinks  they  are  detri- 
mental to  man,  he  calls  "  illth." 

Economic  goods.  Some  useful  goods  are  generally  found 
without  any  efEort  on  the  part  of  man  in  great  abundance  in  the 
form,  at  the  place,  and  at  the  time  they  are  needed.  Such 
goods  are  called  free  goods.  Air,  for  example,  is  a  free  good. 
But  when  a  person  commences  to  make  a  Hst  of  the  things  he 
wants,  he  finds  free  goods  rather  infrequent  on  the  list.  For 
most  goods  some  effort  must  be  put  forth  in  order  to  secure  a 
^supply.  For  example,  farm  products,  the  products  of  the  mines, 
and  the  products  of  the  factories  all  require  effort  in  their  pro- 
duction, hence  they  are  limited  in  quantity  and  are  called 
economic  goods. 

Causes  of  scarcity.  Goods  which  can  be  increased  in  supply 
indefinitely  by  the  use  of  land,  labor,  and  capital  are  scarce 
because  of  the  labor  and  sacrifice  required  in  their  production. 
This  may  be  called  cosi  of  -production  scarcity.  This  class  in- 
cludes most  agricultural  products.     It  will  be  recognized  that 


32  AGRICULTUR.\L  ECONOMICS 

while  in  the  long  run  the  supply  of  farm  crops  depends  upon  the 
activities  of  man,  it  is  also  true  that  variations  in  seasons  and 
the  attacks  of  pests  influence  greatly  the  supply  produced  in 
any  one  year.  The  acreage  of  a  given  crop  is  in  the  control  of 
man,  but  the  production  per  acre  is  in  so  large  a  measure  de- 
termined by  the  weather  that  the  total  production  in  any  one 
year  is  very  uncertain,  hence  the  degree  of  scarcity  of  farm 
products  in  a  given  season  is  in  a  large  measure  the  result  of 
natural  forces  beyond  the  control  of  man. 

The  degree  of  scarcity  of  economic  goods  is  in  many  cases 
influenced  by  men  who  are  in  aj  position  to  limit  the  supply  with 
a  view  to  demanding  a  price  higher  than  would  prevail  under 
competitive  conditions.  Scarcity  created  in  this  way  is  called 
monopoly  scarcity.  Monopohes  arise  out  of  natural  con- 
ditions and  out  of  laws  granting  patents,  trademarks,  copy- 
rights, etc.  The  occasion  of  monopoly  is  not  the  size  of  the 
business  or  the  character  of  the  organization,  but  the  essential 
unity  of  control.  Unity  of  control  makes  it  possible  to  limit 
supply  in  such  a  manner  as  to  command  a  price  which  will 
yield  maximum  total  profits  for  the  monopolists.  It  is  in  this 
sense  that  we  speak  of  monopoly  scarcity. 

Economic  goods  may  be  scarce  because  of  an  absolute  limi- 
tation on  the  supply,  that  is,  there  is  no  way  of  increasing  the 
supply.  Absolute  scarcity  may  be  permanent  or  temporary.  A 
beautiful  picture  painted  by  an  artist  who  has  passed  away  has 
been  given  as  an  example  of  absolute  scarcity  which  is  per- 
manent. Here  there  is  no  chance  of  increasing  the  supply  of 
originals  at  any  time. 

Absolute  scarcity  may  exist  temporarily  in  many  farm  prod- 
ucts. This  is  a  matter  of  great  interest  to  the  farmer.  When  the 
wheat  crop  of  the  United  States  and  Canada  has  been  harvested, 
nine  months  pass  before  the  supply  can  be  increased  from  this 
source.  If  the  supply  is  not  enough  for  the  normal  demand, 
prices  tend  to  rise  and  the  demand  fall  until  there  is  a  balance 
between  the  supply  and  the  demand.  The  prospect  for  a  new 
crop  may  be  unusually  good,  but  the  new  crop  to  be  harvested 
in  July  cannot  be  used  in  June.     The  supply  of  old  wheat  is 


ECONOMIC  GOODS  AND  THEIR  VALUATION  33 

temporarily  in  the  class  of  absolutely  scarce  goods.  Potatoes 
would  serve  as  another  example  of  temporary  absolute-scarcity 
goods. 

Goods  must  be  both  useful  and  scarce  in  order  to  be 
classed  as  economic  goods.  Goods  may  be  useful  because  they 
possess  certain  physical  and  chemical  properties ;  for  example, 
wheat  contains  starch  and  gluten  which  makes  it  a  valuable 
food,  and  cotton  fiber  possesses  tensile  strength  which  makes  it 
useful  in  the  manufacture  of  cloth.  This  is  called  elementary 
utility.  Goods  are  useful  because  of  the  elements  they  possess. 
Wheat  when  transformed  into  bread  has  additional  utility. 
Cotton  fiber  has  additional  utility  when  transformed  into 
clothing.     This  kind  of  utility  is  called  form  utility. 

When  the  flour  and  the  clothing  have  been  manufactured, 
they  may  be  a  long  way  from  the  men  who  are  to  use  them. 
By  shipping  them  to  the  places  where  they  are  most  wanted 
they  are  more  useful.  In  this  way  place  utility  is  added  to  them. 
The  wheat  crop  is  harvested  largely  in  one  season  and  con- 
sumed the  year  around.  Those  who  store  the  wheat  or  flour 
for  many  months  in  order  that  consumers  may  eat  bread  the 
year  around  have  added  time  utility  to  these  goods. 

It  has  been  suggested  that  the  advertiser  adds  utiUty  to  the 
goods.  The  fact  would  seem  to  be  that  advertising  operates 
on  the  prospective  consumer  rather  than  upon  the  goods  and 
changes  his  state  of  mind  regarding  the  goods.  This  may  in- 
crease the  individual  estimate  of  the  importance  of  a  given 
elementary  utility  or  a  given  form  utility. 

Some  goods  will  stand  long  shipment  and  long  storage  with- 
out danger  of  deterioration.  For  example,  wheat,  wool,  and 
lumber  are  in  little  danger  of  deteriorating  in  shipment  and 
storage.  These  we  shall  call  durable  goods.  Other  goods  are 
in  great  danger  of  deterioration  in  transit  and  cannot  be  kept 
long  in  their  original  form.  Strawberries  and  milk  are  examples. 
They  have  commonly  been  called  perishable  goods.  One  of  the 
triumphs  of  modern  inventive  genius  is  the  successful  conver- 
sion of  perishable  goods  into  durable  goods  by  dehydration, 
canning,  and  other  methods  of  preserving. 


34  AGRICULTURAL  ECONOMICS 

Economic  goods  may  again  be  classified  as  permanent  and  as 
temporary  goods  according  to  the  number  of  times  used.  For 
example,  a  piece  of  cotton  cloth  may  be  used  many  times  and 
through  a  series  of  years,  hence  it  is  here  called  a  permanent 
good,  whereas  wheat  flour,  in  the  form  of  bread,  is  used  but 
once  and  is  called  a  temporary  good. 

There  is  a  close  relation  between  the  degree  of  scarcity  of 
a  good  and  the  intensity  of  the  desire  which  people  will  have  for 
it.  Other  things  being  equal  the  greater  the  scarcity  of  a  given 
good,  the  higher  will  be  the  intensity  of  the  desire  for  it ;  the 
greater  the  abundance,  the  lower  the  intensity  of  the  desire. 
Common  observation  teaches  us  that  the,  more  completely  one's 
desires  for  a  given  article  are  satisfied  the  less  he  will  give  for 
an  additional  supply  of  that  good  for  his  own  use.  The  con- 
verse of  this  fact  is  that  in  order  to  induce  people  to  consume 
more  products  it  is  necessary  to  lower  the  price  to  correspond  to 
the  reduced  satisfaction  resulting  from  the  additional  units  of 
goods  consumed.  At  a  higher  price  less  will  be  consumed; 
at  a  lower  price  more  will  be  consumed. 

It  is  obvious  that  the  quantity  of  the  various  farm  products 
demanded  will  depend  upon  a  number  of  conditions.  Other 
things  being  equal,  (i)  the  higher  the  individual  estimates  of  the 
importance  of  the  goods  in  the  minds  of  the  great  mass  of  consumers, 
the  greater  will  be  the  demand.  (2)  The  greater  the  incomes  of 
the  consumers,  the  greater  the  demand  for  goods.  (3)  On  the  other 
hand  the  very  thing  which  great  demand  tends  to  create,  namely, 
high  prices,  tends  to  reduce  the  demand  so  that  the  demand 
varies  inversely  with  the  price. 

The  exchange  value  of  goods.  It  has  been  seen  that  in 
order  to  be  economic  goods,  that  is,  goods  with  a  value  placed 
upon  them,  goods  must  be  both  useful  and  scarce.  There  is  a 
great  difference  in  the  usefulness  and  in  the  abundance  or 
scarcity  of  different  goods ;  hence  there  is  a  corresponding  dif- 
ference in  their  exchange  values.  Exchange  value  has  been 
defined  as  the  quantitative  ratio  in  which  goods  or  services  are  ex- 
changed. For  example,  if  one  bushel  of  wheat  will  exchange  for 
two  bushels  of  oats  we  think  of  wheat  as  worth  twice  as  much 


ECONOMIC  GOODS  AND  THEIR  VALUATION     35 

per  bushel  as  oats.  For  the  sake  of  convenience  it  has  become 
the  custom  to  value  all  other  articles  in  terms  of  one  article 
which  is  made  by  law  the  standard  of  value.  In  most  countries 
gold  is  the  commodity  decided  upon  as  the  standard  of  value. 
The  amount  of  gold  for  which  a  definite  amount  of  a  given 
commodity  will  exchange  is  called  the  price  of  that  commodity. 
In  other  words,  price  is  value  expressed  in  terms  of  the  standard 
of  value,  or  as  we  commonly  speak  of  it,  in  terms  of  money.  The 
value  of  farm  products  may  remain  the  same,  when  expressed 
in  terms  of  each  other,  and  yet  the  prices  of  these  products 
may  all  change  because  of  a  rise  or  fall  in  the  value  of  gold: 
The  value  of  a  given  weight  of  gold  (25.8  grains  9  tenths  fine) 
may  be  looked  upon  as  the  measuring  stick  with  which  the 
values  of  other  products  are  measured. 

The  exchange  value  of  a  specific  good  at  a  given  time  is  de- 
termined by  its  relative  abundance,  that  is,  by  the  supply  in 
relation  to  the  demand  for  this  good  when  compared  with 
other  goods. 

Behind  the  fact  of  demand,  as  has  been  noted,  is  the  more 
fundamental  fact  of  human  wants.  The  desire  to  satisfy 
wants  impels  men  to  produce  supplies  of  utilities,  i.e.  things 
which  satisfy  wants.  The  effort  which  man  must  put  forth  in 
order  to  gain  the  means  of  satisfying  his  wants  sets  a  limit 
to  the  supply  of  economic  goods.  It  usually  happens  that  long 
before  all  of  the  wants  of  a  man  are  satisfied,  the  pain  of  exer- 
tion becomes  so  great  that  it  more  than  balances  the  possible 
pleasure  which  might  be  produced  by  consuming  the  products 
of  further  exertion.  So  long  as  there  is  an  unsatisfied  desire 
for  an  article,  that  article  will  have  some  value  placed  upon  it. 
The  relative  intensity  of  the  buyer's  desire  for  an  article  deter- 
mines how  highly  he  will  value  it,  and  what  price  he  will  be 
willing  to  pay  for  it ;  but  the  price  which  must  be  paid  deter- 
mines how  much  of  the  goods  he  will  take  for  his  own  use  and 
how  completely  the  want  will  be  satisfied.  In  short,  the  higher 
the  price  the  more  intense  will  be  the  desire  which  will  be  left 
unsatisfied. 

On  the  other  hand,  the  natural  facilities  for  increasing  the 


36  AGRICULTURAL  ECONOMICS 

supply  will  determine  how  high  the  price  must  be  before  the 
producer  can  afford  to  increase  the  supply.  Marshall  says, 
"  For  long  periods  the  supply  price  is  that  which  is  just  needed 
to  call  forth  those  new  investments  of  capital,  material  and 
personal,  which  are  required  to  make  up  a  certain  aggregate 
volume  or  production."  ^  The  higher  the  cost  at  which  the 
producer  adds  an  increment  to  the  supply,  the  more  limited  the 
total  supply  that  will  be  put  upon  the  market ;  but  the  smaller 
the  amount  of  an  economic  good  consumed,  the  more  intense 
is  the  desire  for  it  and  the  higher  it  is  valued.  Thus  it  is  that 
the  marginal  utility,  or  the  intensity  of  the  last  want  which  is 
satisfied,  tends  to  adjust  itself  to  the  cost  of  producing  that  share 
of  the  supply  which  is  produced  under  the  most  unfavorable 
circumstances.  But  it  is  also  true  that  the  price  which  is 
offered  at  a  given  time,  and  which  corresponds  to  the  marginal 
utiUty  at  that  time,  determines  the  maximum  amount  which 
can  be  expended  in  the  production  of  a  given  article  with  profit, 
and  hence  determines  ultimately  how  far  down  the  scale  of 
less  and  less  favorable  circumstances  its  production  can  be 
carried  on.  Thus  it  is  that  the  forces  which  lie  behind  the 
demand  for  an  article,  and  the  conditions  under  which  the 
article  may  be  supplied,  regulate  its  price. 

Causes  of  fluctuation  in  values.  Values  may  fluctuate  from 
year  to  year  because  of  changes  in  the  quantity  produced,  or 
changes  in  the  quantity  demanded,  that  is,  changes  in  the 
supply  or  in  the  demand.  Fluctuation  in  the  annual  produc- 
tion may  be  due  to  the  climate,  to  the  ravages  of  insects,  or  to 
the  conscious  changes  in  the  plans  of  a  considerable  proportion 
of  the  producers.  The  more  durable  the  product  the  less  the 
value  will  fall  as  the  result  of  an  unusually  large  crop.  A  por- 
tion of  the  supply  can  be  held  over  until  the  next  year.  The 
fact  that  wheat  can  be  held  over  at  a  relatively  small  cost  and 
without  losing  its  usefulness,  while  potatoes  of  one  year's 
production  have  little  or  no  value  after  the  new  crop  becomes 
generally  available,  explains,  in  part,  why  a  given  variation  in 
the  wheat  crop  influences  the  price  less  than  the  same  propor- 

1  Alfred  Marshall,  "Principles  of  Economics,"  third  edition,  p.  448. 


ECONOMIC   GOODS  AND   TPIEIR   VALUATION  37 

tional  variations  in  the  potato  crop.  The  prices  of  farm  prod- 
ucts are  influenced  by  the  fact  that  most  of  the  supply  of  a 
given  product  becomes  available  during  a  small  portion  of  the 
year,  and  this  supply  must  last  until  the  next  year's  supply  is 
ready  for  use.  A  factory  manufacturing  steel  rails,  copper 
wire,  or  cotton  cloth  may  put  out  a  continuous  flow  of  goods, 
but  with  most  farm  products  the  output  is  intermittent. 
The  tendency  is  for  the  price  to  be  low  when  the  greatest 
supply  becomes  available,  and  high  in  the  period  prior  to 
the  arrival  of  the  new  supply.  This  is  due  to  the  fact  that  a 
part  of  the  supply  must  be  stored,  which  involves  the  expense 
for  storage  room,  interest  on  the  money  invested  in  the  prod- 
uct, and  a  loss  due  to  shrinkage. 

The  variation  in  demand  due  to  changes  in  prices  is  very  dif- 
ferent with  different  classes  of  goods.  For  some  goods  the  de- 
mand is  very  stable ;  for  others  it  is  very  elastic.  Where  the 
demand  is  stable  it  takes  a  big  change  in  prices  to  force  people 
to  make  any  changes  in  the  amounts  consumed.  On  the  other 
hand,  where  the  demand  is  elastic  the  quantity  consumed  tends 
to  fall  off  rapidly  with  increased  prices  or  decreased  suppUes 
of  money  to  spend.  By  elasticity  of  demand  is  meant  its 
sensitiveness  to  changes  in  the  price  as  a  result  of  changes  in 
the  quality  or  the  quantity  of  the  product  or  in  the  purchasing 
power  of  the  commodity.  A  stable  demand  is  one  which  is 
not  easily  influenced  by  changes  in  these  conditions.  The 
demand  for  bread  and  for  potatoes  is  fairly  regular  throughout 
the  year,  and  a  considerable  change  in  price  is  required  to  make 
any  important  change  in  the  demand,  hence,  the  demand  for 
these  articles  may  be  said  to  be  inelastic,  or  stable.  On  the 
other  hand,  the  demand  for  eggs  varies  greatly  during  the  year 
in  response  to  changes  in  the  price  and  in  the  quahty  of  the 
supply,  hence  the  demand  is  said  to  be  elastic.  The  more 
readily  a  substitute  can  be  found  the  more  elastic  will  be  the 
demand,  and  the  less  will  prices  fluctuate  as  a  result  of  changes 
in  the  supply.  Where  substitutions  are  easily  made  the  quality 
of  the  product  affects  greatly  the  quantity  demanded.  If  the 
first  order  of  cabbages  made  by  the  housewife  turns  out  to  be 


38  AGRICULTURAL  ECONOMICS 

of  poor  quality  she  is  likely  to  try  some  other  vegetable  the 
next  time.  In  this  way  the  poor  quality  of  one  man's  products 
may  reduce  the  price  which  another  man  may  get  for  first-class 
goods.     This  illustrates  what  is  called  sohdarity  of  interest. 

The  demand  is  steadier  for  established  grades,  that  is,  goods 
of  standard  qualities,  than  for  unstandardized  articles.  Many 
people  will  buy  a  given  article  if  they  are  sure  of  securing  goods 
of  high  quality  who,  when  in  doubt,  refrain  from  making  the 
purchase.  This  places  a  premium  upon  goods  of  known  stand- 
ard of  .quality  over  what  goods  of  the  same  quality  would 
command  if  sold  in  an  ungraded  mixture  along  with  goods  of 
varying  quality.  Standardization  is  one  purpose  of  trade- 
marks. The  trade-mark  is  of  high  value  only  when  it  stands 
for  an  established  quality  that  can  be  counted  upon.  The 
name  of  the  farm  might  well  be  placed  upon  the  label  of  the 
milk  and  cream  bottles,  or  stamped  upon  the  eggs,  the  berry 
boxes,  the  apple  barrels,  the  grape  baskets,  etc.  The  regis- 
tration of  farm  names  for  this  purpose,  giving  the  exclusive 
use  of  a  given  name  to  a  given  farmer,  might  well  be  made 
possible  by  legislation.  This  use  of  a  trade-mark  will  enable 
the  purchasers  to  buy  with  a  knowledge  of  the  character  of  the 
producer,  and  would  result  in  a  greater  range  in  prices  due  to 
variations  in  the  quality  of  the  goods.  This  would  put  a  pre- 
mium on  the  production  of  goods  of  high  quality  and  be  an 
effective  stimulus  to  good  agriculture. 

The  individual  farmer  is  often  not  in  a  position  to  incur  the 
expense  of  advertising  a  given  brand  of  products  to  such  an 
extent  as  to  establish  a  reputation  beyond  the  limits  of  the  local 
market.  Community  action  is  often  essential  to  the  establish- 
ment of  brands  of  farm  products  on  distant  markets.  Com- 
munities have  succeeded  in  establishing  brands  of  fruit  and 
other  perishable  products.  The  apple  growers  of  the  Pacific 
northwest,  the  grape  growers  of  New  York,  the  butter  and  egg 
producers  of  Denmark,  are  conspicuous  examples. 

Costs  and  prices.  It  has  been  common  to  hear  the  statement, 
"  The  price  should  be  high  enough  to  pay  the  cost  of  production 
and  a  reasonable  profit."    This  phrase  when  properly  under- 


ECONOMIC  GOODS  AND  THEIR  VALUATION     39 

stood  is  full  of  significance.  It  is  a  misinterpretation,  however, 
to  assume  this  phrase  to  mean  that  every  producer  of  a  given 
product  has  a  right  to  expect  and  to  demand  a  price  which  will 
cover  his  costs  and  give  him  what  he  considers  a  reasonable 
profit.  There  are  many  causes  of  variation  in  costs :  (i)  varia- 
tion in  natural  conditions,  such  as  soil  and  climate  of  the  dif- 
ferent areas  producing  a  given  crop,  (2)  variations  in  the  abun- 
dance of  labor  in  the  different  localities,  (3)  variation  in  the 
kinds  of  equipments  which  can  be  made  use  of,  (4)  variations 
in  the  distance  from  the  market,  and  (5)  variations  in  the  effi- 
ciency of  the  farmers  who  give  direction  to  the  work  on  the 
different  farms.  As  a  result  of  the  wide  variations  in  the 
efficiency  of  the  instruments  of  production,  it  usually  happens 
that  there  is  an  inefficient  producer  here  and  there  who  is  pro- 
ducing at  a  cost  greater  than  the  price  at  which  other  farmers 
find  it  profitable  to  produce  enough  to  supply  the  market. 
If  the  price  were  artificially  pushed  up  to  a  point  where  the  in- 
efficient farmer  can  make  a  profit,  this  would  make  the  enter- 
prise exceedingly  profitable  to  the  efficient  farmers,  and  would 
tend  to  increase  their  production,  the  greater  supply  would 
force  prices  down,  and  the  second  state  of  the  inefficient  farmer 
would  be  worse  than  the  first.  Some  of  those  who  are  produc- 
ing at  a  loss  might  well  change  to  some  other  line  of  production 
in  which  their  quahfications  count  for  more.  It  often  happens, 
for  example,  that  a  low  grade  dairyman  is  a  high  grade  tobacco 
producer,  that  a  low  grade  grain  farmer  can  make  money  in  the 
grazing  of  cattle.  Every  farmer  should  strive  to  get  into  the 
field  of  work  in  which  he  is  best  able  to  compete. 

Low  efficiency  of  the  farmer  in  a  given  line  of  production 
is  only  one  of  the  causes  which  may  result  in  costs  which  exceed 
prices.  For  example,  the  wheat  regions  of  the  world  are 
numerous  and  widely  scattered.  The  cost,  per  bushel,  of  pro- 
ducing wheat  and  putting  it  upon  the  world's  central  wheat 
market,  Liverpool,  vary  greatly.  During  periods  when  the 
supply  of  wheat  is  increasing  slowly  and  the  demand  for  wheat 
is  increasing  at  a  slightly  more  rapid  rate,  the  price  of  wheat 
will  tend  to  remain  high  enough  to  retain  the  wheat  industry 


40  AGRICULTURAL  ECONOMICS 

in  the  region  where  the  costs  are  greatest.  When,  however,  as 
a  result  of  a  new  discovery  or  the  extension  of  means  of  trans- 
portation a  new  and  fertile  wheat  region  enters  into  competition 
with  the  old  regions,  it  may  happen  that  the  supply  of  wheat 
will  increase  more  rapidly  than  the  population,  and  to  induce 
the  people  to  consume  more  wheat  per  capita  the  price  must 
be  lowered.  As  a  result  of  the  fall  of  wheat  prices  some  of  the 
old  wheat  regions  find  their  costs  greater  than  the  prices  they 
can  get,  and  will  find  it  necessary  to  change  to  some  other  crop. 
This  condition  was  brought  about  in  the  wheat  industry  when 
the  fertile  wheat  regions  of  Kansas,  Minnesota,  and  the  Dakotas 
were  made  accessible  and  poured  their  abundant  supplies  of 
grain  upon  the  markets  of  Europe.  The  farmers  of  England 
found  wheat  growing  a  losing  enterprise.  Had  they  understood 
the  cause  of  the  fall  in  wheat  prices  they  would  have  known  that 
the  one  thing  to  do  was  to  drop  wheat  growing  and  take  up  some 
other  line  where  foreign  competition  was  not  so  keen.  After 
a  long  time  this  came  about,  the  wheat  lands  were  converted 
into  meadows  and  pastures,  and  the  dairy  industry  paid  well 
for  the  efforts  expended.  Unfortunately  many  farmers  held 
to  wheat  production  long  after  it  ceased  to  yield  a  profit.  In 
some  cases  this  resulted  in  bankruptcy  which  alertness  to  the 
price  situation  might  have  avoided. 

We  are  not  without  illustrations  of  this  principle  in  this 
country.  The  falling  wheat  price  due  to  the  rapid  growth  of 
the  wheat  industry  in  the  Northwest  was  an  important  factor 
in  driving  Wisconsin  farmers  from  a  system  of  grain  farming 
with  wheat  as  the  money  crop  into  the  live  stock  industry 
with  dairy  products  as  the  chief  sources  of  income. 

The  westward  movement  of  the  wheat  industry  in  the  North 
was  paralleled  by  the  westward  expansion  of  cotton  production 
in  the  South.  From  the  old  centers  in  Georgia  and  the  Caro- 
linas,  the  cotton  industry  extended  into  the  fertile  "  Black 
Prairie  of  Alabama,"  sprang  up  in  the  rich  alluvial  of  the  Mis- 
sissippi and  confluent  rivers,  and  in  the  Black  Prairie  of  Texas. 
The  result  was  a  rapid  increase  in  the  quantity  of  cotton  pro- 
duced.   The  increased  supply  was  produced  at  a  lower  cost 


ECONOMIC   GOODS   AND   THEIR  VALUATION  41 

than  was  possible  in  the  old  regions.  The  obvious  result  was 
falling  prices  and  an  unprofitable  industry  in  the  old  cotton 
regions. 

Another  illustration,  which  is  of  particular  interest  to-day, 
may  be  drawn  from  the  Burley  tobacco  situation  in  Kentucky. 
Burley  tobacco  was  first  grown  in  Kentucky  in  the  northern 
part  of  the  bluegrass  region.  This  is  a  rough  country  where  the 
soil  soon  lost  much  of  its  fertihty.  The  industry  gradually 
spread  southward  into  the  counties  of  Scott,  Bourbon,  Franklin, 
Woodford,  Fayette,  and  Jessamine.  These  counties  contain 
the  blue  limestone  region  known  as  the  heart  of  the  bluegrass 
country.  This  is  a  region  of  unusual  natural  fertility.  A 
large  proportion  of  this  land  had  remained  in  bluegrass  pastures 
from  the  first  settlement  of  the  country.  As  the  tobacco  in- 
dustry commenced  to  encroach  upon  this  fertile  region  the 
farmers  found  it  exceedingly  profitable  to  plow  up  the  old  pas- 
tures and  plant  tobacco.  Under  these  conditions  the  supply 
of  tobacco  was  increased  enormously.  Prices  fell,  but  the 
farmers  in  the  new  regions  of  production  were  making  large 
profits  at  prices  which  meant  starvation  to  the  growers  of  the 
old  Burley  tobacco  centers.  The  result  was  the  "  night  rider  " 
movement  in  1908,  which  was  a  strike  in  the  dark,  figuratively 
as  well  as  Hterally.  The  men  fighting  for  higher  prices  came 
from  the  regions  of  high  cost  of  production.  They  failed  to 
understand  that  the  fundamental  cause  of  falHng  prices  was 
the  fact  that  an  increase  in  the  supply  was  being  produced  at 
a  reduced  cost.  The  "  night  riders  "  forced  practically  all  the 
Burley  tobacco  growers  to  omit  growing  tobacco  in  1908  with 
a  view  to  securing  a  high  price  for  the  1907  tobacco  crop  then 
in  the  hands  of  the  farmers.  This  method  of  limiting  the  supply 
was  temporarily  effective,  and  prices  rose  to  a  level  far  above 
that  necessary  to  stimulate  an  adequate  supply.  The  next 
two  years  brought  an  unusual  expansion  of  Burley  tobacco 
production  on  the  rich  lands  of  central  Kentucky  followed  by  a 
decline  of  this  crop  on  the  poorer  tobacco  lands  in  the  northern 
edges  of  the  tobacco  region.  Many  look  upon  this  episode  as 
a  victory  of  the  farmers  over  the  tobacco  trust,  and  there  were 


43  AGRICULTURAL  ECONOMICS 

unquestionably  some  bad  practices  on  the  part  of  the  tobacco 
buyers  which  were  improved  as  a  result  of  this  experience ;  but 
it  was,  fundamentally,  a  victory  of  economic  forces  over  the 
inertia  of  the  farmers.  The  economic  fact  of  lower  cost  of 
production  in  a  large  area  capable  of  supplying  the  demand 
forced  the  tobacco  growers  to  transfer  their  activities  from  the 
areas  of  high  cost  to  the  areas  of  low  cost. 

We  have  dwelt  at  considerable  length  upon  the  economic 
forces  which  determine  prices  because  the  relative  prices  of 
products  and  their  relative  costs  of  production  determine  what 
the  farmer  should  produce  if  he  would  win  maximum  profits 
as  a  result  of  his  farming  operations. 

The  cost  of  production  is  determined  by  a  great  number  of 
things  all  of  which  will  be  taken  up  as  we  proceed  to  study  the 
problems  of  farm  organization  with  a  view  to  securing  a  maxi- 
mum total  margin  between  cost  and  price.  One  thing  should 
be  remembered,  however,  that  the  same  general  economic 
principles  underlie  the  elements  of  costs  which  underlie  the 
prices  of  products.  What  is  to  the  farmer  cost  of  production 
is  to  the  laborer  the  price  paid  for  his  service.  What  is  cost  of 
feed,  seed,  etc.,  is  also  price.  What  is  cost  of  using  land  is  the 
competitive  price  paid  for  the  use  of  the  land.  Thus  it  is  that 
value  is  at  the  bottom  of  all  our  considerations  in  agricultural 
economics,  whether  viewed  from  the  standpoint  of  cost  or 
price.  What  we  are  needing  as  farmers  is  to  learn  how  to  ad- 
just ourselves  to  price  forces  in  such  a  manner  as  to  get  the 
greatest  satisfaction  for  the  effort  put  in,  consistent  with  na- 
tional welfare,  and  when  viewed  through  a  series  of  years. 


CHAPTER  V 
THE   CHOICE   OF   CROPS 

All  will  agree  that  in  managing  a  farm  one  should  produce 
the  crops  which  pay  best.  The  difficulty  is  to  know  which 
crops  actually  add  the  most  to  the  farmer's  profits.  A  manufac- 
turer may  decide  upon  some  one  line  of  production,  and  devote 
his  entire  time  to  the  one  thing ;  but  most  farmers  find  it  neces- 
sary to  produce  a  number  of  crops. 

Suppose  a  farmer  found  one  crop  profitable  and  decided 
to  produce  nothing  else,  what  difficulties  would  arise?  The 
risk  of  depending  entirely  on  one  crop,  —  "  putting  one's  eggs 
all  in  one  basket,"  —  has  often  been  used  as  an  argument  against 
the  single  crop  system.  This  is  a  point  in  favor  of  diversifica- 
tion which  should  not  be  lost  sight  of,  but  which  should  be  given 
no  more  than  its  fair  weight  in  the  argument.  If  the  one  crop 
requires  a  very  large  proportion  of  one's  time  through  the 
farming  season,  it  may  pay  to  specialize.  If  another  crop  can- 
not be  introduced  without  cutting  the  area  of  the  special  crop, 
the  question  should  be  decided  on  the  basis  of  which  system  will 
pay  best  in  the  long  run.  In  figuring  long-time  average  profits, 
soil  depreciation  or  appreciation  should  always  be  considered 
and  the  element  of  risk  should  be  covered. 

One  of  the  chief  economic  reasons  for  diversified  farming  is 
to  provide  profitable  employment  more  nearly  throughout 
the  year  for  men  and  horses.  Suppose  a  farmer  should  decide 
to  produce  nothing  but  Indian  corn.  The  work  of  preparing 
the  seed  bed,  planting  and  cultivating  the  crop,  might  keep 
him  busy  for  from  eight  to  ten  weeks  in  the  spring  and  early 
summer.  The  corn  laid  by,  there  would  be  nothing  to  do  until 
corn  harvest.     The  corn  harvested,  the  farmer  would  have 

45 


44  AGRICULTURAL  ECONOMICS 

another  rest.  From  the  point  of  view  of  the  employment  of 
man  and  horse  labor,  other  enterprises  are  needed.  Small 
grain,  oats  or  barley,  demands  the  farmer's  energy  just  when  he 
cannot  be  working  on  the  corn.  The  oats,  barley,  or  spring 
wheat  is  seeded  very  early  in  the  spring,  usually  beginning 
about  a  month  before  the  soil  and  air  are  warm  enough  for 
planting  corn.  The  corn  is  then  planted  and  cultivated  several 
times  before  hay  harvest.  Not  only  does  the  small  grain 
supplement  the  corn  in  providing  employment,  but  it  provides 
the  nurse  crop  for  seeding  meadows.  The  harvesting  of  a 
limited  amount  of  clover  hay  is  supplementary  to  corn  in  its 
labor  demands  in  the  north  central  states.  The  clover  harvest 
precedes  the  oat  harvest  and  laps  with  the  last  half  of  corn 
cultivation,  but  this  lapping  may  not  reduce  the  amount  of 
corn  which  one  man  may  grow,  because  the  limit  on  corn  is 
set  by  the  area  one  can  prepare  the  seed  bed  for,  plant,  and 
cultivate  the  first  and  second  time.  After  the  corn  reaches  this 
stage,  one  can  care  for  it  and  devote  from  a  third  to  a  half  of 
his  time  to  other  work. 

Corn,  oats,  and  clover  may  be  called  supplementary  crops, 
because  they  fit  together  nicely  from  the  standpoint  of  demand 
for  labor  in  their  production.  They  are  also  supplementary 
in  their  utiUzation  on  the  dairy  farm,  silage,  clover  hay,  and 
ground  oats  making  excellent  cow  feed,  and  the  oat  straw  is 
needed  for  bedding. 

Crops  which  require  attention  at  the  same  time  of  year  are 
said  to  be  competitive  or  conflicting  crops.  Corn,  cotton,  tobacco, 
sugar  beets,  and  potatoes  are  examples  of  competing  crops 
which  conflict  with  each  other  in  their  demands  for  the  atten- 
tion of  the  farmer,  and  it  happens  that  all  these  are  tilled  crops, 
and  for  this  reason  any  one  of  them  may  be  chosen  so  far  as 
the  problem  of  maintaining  tilth  is  concerned.  Other  examples 
of  competing  crops  are  oats,  barley,  and  spring  wheat.  These 
crops  compete  for  the  farmer's  time  and  are  about  equally 
useful  as  nurse  crops  for  starting  meadows,  hence  the  most 
profitable  one  should  be  chosen  and  the  others  dropped  out  of 
the  field  system. 


NOV.  I     DEC.    I     JAN. 


OATS 


BARNEY 


mn 


III  I 


I  III 


TOfeACCO 


liljl  M  I 


MAR.  I     APR.    I    MAY    |   JUNE       JULY    [    AUO.    |  SEPT.   [     OCT.     [    NOV.        DEC.     |     JAN.    |    FEB. 

Figure  i.  —  Distribution  of  man  labor  on  lo  acres  of  oats,  15  acres  of  barley, 
30  acres  of  corn,  and  4  acres  of  tobacco  on  a  farm  near  Madison,  Wisconsin, 
in  igio. 


46  AGRICULTURAL  ECONOMICS 

Should  one  grow  the  crop  which  yields  the  greatest  value  per  acre  t 
Not  necessarily,  for  the  crop  which  sells  for  the  most  may  have 
cost  very  much  more,  and  the  net  proceeds  might  be  relatively 
small.  Should  one  select  the  crop  which  yields  the  maximum 
net  profit  per  acre?  There  are  circumstances  where  this  would 
be  a  safe  rule,  but  as  a  general  principle  this  standard  fails. 
Crops  which  require  essentially  the  same  amount  of  labor  and 
the  same  kind  of  equipment  may  be  compared  on  this  basis. 
For  example,  oats  and  barley  lend  themselves  to  this  basis 
of  comparison  without  great  danger  of  mistakes.  In  case  of 
tobacco  and  Indian  corn  this  would  not,  however,  be  a  safe 
basis  for  comparing  relative  profitableness  for  the  reason  that 
the  tobacco  requires  much  more  labor  per  acre  than  does  the 
corn,  and  one  man  can  grow  three  or  four  times  as  many  acres 
of  corn  as  of  tobacco. 

Profit  per  hour  of  man  labor  has  been  suggested  as  a  basis 
of  comparison  where  one  crop  requires  much  more  labor  than 
another.  Where  the  two  crops  conflict  at  all  stages  and  require 
the  same  class  of  labor,  this  may  serve  as  a  fair  basis  of  com- 
parison ;  but  where  a  large  amount  of  labor  is  demanded  on  the 
one  crop  at  a  time  of  year  when  there  is  no  demand  for  labor 
on  the  other  crop,  a  serious  difficulty  in  comparing  profits  is 
introduced.  For  example,  tobacco  and  corn  may  conflict 
throughout  the  growing  and  harvesting  season,  but  the  corn  may 
provide  more  labor  in  the  winter,  utilizing  the  silage  in  the 
dairy,  at  a  time  when  no  other  profitable  employment  could  be 
found.  Under  these  circumstances  corn  might  add  more  to 
the  farmer's  profit  than  tobacco,  even  though  tobacco  yielded 
a  higher  return  per  hour  on  the  average  than  corn.  For  example, 
assume,  that  after  paying  all  expenses,  excepting  for  labor,  the 
net  return  left  as  pay  for  labor  and  managerial  activity  was 
40  cents  per  hour  for  labor  on  corn  and  its  utilization  in  the 
dairy,  and  50  cents  per  hour  for  labor  on  tobacco ;  but  that  the 
two  crops  were  competitive  during  only  60  per  cent  of  the  labor 
hours  put  upon  corn  and  cows.  Let  us  suppose,  however,  that 
during  the  remaining  40  per  cent  of  the  time  the  work  at  which 
the  tobacco  man  could  be  employed  yielded  only  15  cents  per 


THE  CHOICE  OF  CROPS  47 

hour.  In  this  case,  for  each  hundred  hours  the  corn  dairyman 
received  $40,  whereas  the  tobacco  man  received  $30  plus  $6, 
or  $36  for  tobacco  and  supplementary  work. 

It  has  been  suggested  that  profit  per  acre,  multiplied  by  the 
number  of  acres  a  fnan  can  operate  may  be  a  better  method  of 
comparing  the  relative  profitableness  of  competing  crops  than 
profits  per  hour.  This  method  would  seem  to  possess  all  the 
merit  of  the  other  methods  mentioned,  but  is  not  without  the 
objection  that  whereas  corn,  for  example,  may  be  put  in  the 
silo  and  made  the  basis  of  winter  employment  in  the  dairy,  no 
such  farm  enterprise  rests  upon  tobacco.  Furthermore,  to- 
bacco usually  conflicts  not  only  with  corn  but  with  small  grains. 
Tobacco  lends  itself  to  a  single  crop  system.  For  this  reason 
it  becomes  necessary  to  compare  the  profits  from  tobacco  plus 
whatever  may  be  combined  with  this  single  crop,  with  corn, 
oats,  and  hay,  plus  the  live  stock  industry  which  is  based  upon 
these  crops.  In  this  case  the  effect  upon  the  land  should  be 
carefully  considered. 

Where  two  crops  confhct  and  the  increase  of  the  one  requires 
the  decrease  of  the  other,  the  various  rules  may  be  used  to  aid 
in  passing  judgment,  but  in  the  final  analysis  all  cases  come  to 
this :  Everything  considered,  choose  from  each  group  of  competing 
crops  the  one  which  will  add  most  to  the  farmer^ s  total  net  profit, 
and  combine  as  many  7ion-competing  crops  as  will  add  enough 
to  the  total  profits  of  the  farm  to  make  it  worth  his  time  to  produce 
this  crop  rather  than  use  the  time  for  self-improvement  or  the  en- 
joyment of  life. 

When  this  principle  of  crop  selection  is  followed,  it  will 
not  be  true,  necessarily,  that  each  crop  will  be  grown  where  the 
facilities  for  its  production  are  the  greatest;  for  it  may  happen, 
for  example,  that  in  the  region  where  the  facihties  for  the  pro- 
duction of  sugar  beets  are  best,  tobacco  or  some  other  competing 
crop  will  enable  the  farmer  to  win  a  larger  net  profit,  in  which 
case  the  sugar  beet  might  well  be  excluded  from  the  system  of 
crop  rotation  in  the  very  region  where  the  natural  conditions 
for  its  production  are  best. 

It  is  by  knowing  relative  prices  that  the  farmers,  who  know 


48  AGRICULTURAL  ECONOMICS 

roughly  relative  costs,  are  able  to  choose  wisely  from  a  given 
group  of  competing  crops.  These  prices  are  the  resultant  of 
the  forces  lying  behind  demand  and  supply.  Assuming  a 
demand,  the  supply  of  a  given  commodity  is  influenced  by  the 
extent  of  the  area  available  for  its  production  within  the  terri- 
tory competing  on  the  same  markets.  In  the  case  of  the  great 
staples  the  market  is  world-wide.  Hence  a  knowledge  of  the 
agricultural  geography  of  the  world  is  essential  to  a  well-bal- 
anced judgment  on  the  question  of  probable  price  relations. 

Let  us  compare  the  four  competing  crops,  —  cotton,  Indian 
corn,  sugar  beets,  and  potatoes,  —  with  regard  to  the  extent  of 
territory  available.  The  areas  available  for  corn  and  cotton 
overlap,  but  the  area  available  for  cotton  culture  is  more  limited 
than  the  area  available  for  growing  Indian  corn.  If  cotton  were 
to  be  excluded  wherever  Indian  corn  can  be  grown,  the  cotton 
supply  would  be  very  small,  whereas  corn  can  be  produced  in 
enormous  quantities  outside  of  the  potential  cotton  regions. 
The  result  is  that  the  relative  prices  of  cotton  and  corn  tend  to 
be  such  that  cotton  will  pay  better  than  corn  on  the  best  cotton 
lands  and  the  extent  of  the  area  planted  to  cotton  and  the  extent 
to  which  cotton  will  drive  corn  out  of  their  common  territory 
will  depend  upon  the  relative  demand  for  these  two  products. 
History  shows  that  corn  has  not  found  a  place  on  the  best 
cotton  land  of  the  South  as  a  commercial  crop.  It  may  pay 
to  grow  corn  for  home  use  in  the  cotton  belt,  and  not  pay  to 
grow  it  to  sell  or  for  commercial  hog  or  cattle  production. 
Again,  a  small  amount  of  corn  may  be  grown  on  a  cotton  farm 
without  Hmiting  the  cotton  area  which  one  family  can  handle. 
This  is  because  a  family  can  grow  more  cotton  than  it  can  pick, 
and  a  small  amount  of  corn  may  be  supplementary  to  cotton. 
It  is  this  commercial  demand  for  cotton  and  the  fact  that  cotton 
conflicts  with  the  commercial  growing  of  all  other  crops  that 
has  had  much  to  do  in  forcing  upon  the  South  the  one  crop 
system  with  all  its  disadvantages  of  probable  soil  depletion  and 
the  risk  of  crop  failure  of  price  depression.  Whenever  cotton 
prices  have  been  low,  some  planters  have  given  more  attention 
to  other  crops.     This  has  limited  the  supply  of  cotton  and  re- 


THE   CHOICE  OF   CROPS  49 

suited  in  higher  prices,  then  cotton  has  again  paid  best  and 
continued  to  be  king  in  the  South. 

Indian  corn  and  sugar  beets  have  wide  areas  of  common 
territory  so  far  as  the  physical  and  biological  conditions  of 
plant  growth  are  concerned.  It  happens,  however,  that  sugar 
beets  thrive  in  northwestern  Europe  and  in  the  western  part 
of  the  United  States  where  climatic  conditions  do  not  favor 
the  culture  of  Indian  corn.  In  other  words,  the  area  suited  to 
Indian  corn  is  much  more  limited  than  the  area  suited  to  sugar 
beets.  The  normal  economic  result  is  that  corn  prices  are  high 
enough  to  enable  this  crop  to  crowd  sugar  beets  out  of  the  sys- 
tem of  farming  throughout  the  areas  best  suited  to  Indian  corn. 
The  opportunities  for  producing  sugar  beets  are  so  great  out- 
side of  the  corn  belt  as  to  yield  a  supply  great  enough  to  keep 
sugar  prices  too  low  to  enable  sugar  beets  to  encroach  very  far 
over  the  margin  of  the  potential  corn  area. 

Potatoes  can  be  grown  more  widely  than  corn  or  sugar  beets. 
Potatoes  thrive  on  sandy  soils  which  are  less  valuable  for  the 
production  of  corn  and  sugar  beets.  The  result  is  that  com- 
mercial potato  growing  is  found  most  largely  on  light  lands 
outside  of  the  corn  belt,  although  for  local  consumption  they 
are  produced  throughout  the  corn  belt. 

The  general  truth  is  that  where  two  competing  crops  which  are 
in  general  demand  can  be  grown  on  the  same  land,  prices  will 
tend  to  he  such  that  the  one  with  the  more  limited  potential  area 
will  have  its  choice  of  territory  and  its  area  will  expand  in  the 
direction  of  the  less  and  less  favorable  conditions  for  its  produc- 
tion until  rising  costs  and  lowering  prices,  due  to  increased  pro- 
duction, will  make  it  unable  to  extend  farther,  owing  to  greater 
profits  secured  from  the  competing  crop.  As  a  result  of  price 
variations,  there  will  ever  be  more  or  less  uncertainty  in  the 
zones  where  the  differences  in  profits  are  never  great.  In 
other  regions,  where  the  advantage  of  some  one  crop  is  great, 
the  system  of  cropping  becomes  definitely  established. 

Distance  from  market  has  long  been  recognized  as  an  im- 
portant factor  in  determining  what  should  be  produced  on  a 
given  farm.     As  one  rides  from  a  large  city  into  the  country, 


50  AGRICULTURAL  ECONOMICS 

one  will  usually  find  the  market  garden  district  just  beyond  the 
outlying  plotted  area  held  speculatively  for  city  lots.  Next 
beyond  this,  and  often  more  or  less  intermingled  with  the 
gardens  area  at  first,  are  found  farms  devoted  to  the  produc- 
tion of  city  milk,  beyond  this  may  be  found  the  butter  industry, 
the  cheese  industry,  beef  or  pork  production  or  grain  farming, 
depending  upon  the  location  of  the  city. 

This  division  of  territory  among  the  various  types  of  farming 
or  fines  of  production  is  the  result  of  relative  farm  prices  of 
the  different  products.  This  difference  in  farm  prices  is  due 
to  two  factors,  namely,  the  perishabifity  and  the  quantity  pro- 
duced per  acre  of  the  products.  Perishable  products  must  be 
produced  near  enough  to  the  market  or  under  such  favorable 
conditions  of  transportation  that  the  commodity  can  be  put 
on  the  market  in  good  condition.  Other  things  being  equal, 
the  greater  the  c|uantity  produced  on  a  given  area,  the  lower 
will  be  the  price  per  pound,  and  the  closer  to  the  market  it 
should  be  produced.  It  is  usually  a  combination  of  these  two 
factors  that  puts  market  gardens  near  the  markets,  and  puts 
sheep  and  wheat  farms  at  a  distance  from  the  market. 

Can  the  farmer  work  out  the  most  profitable  system  of  crops  for 
his  farm,  once  for  all,  so  that  he  need  give  this  matter  no  further 
attention?  Unfortunately  the  economic  problems  of  farm 
management  are  never  permanently  solved.  Changes  in  rela- 
tive prices  of  competing  crops  often  make  it  necessary  to  change 
from  the  one  to  the  other.  This  change  in  relative  prices  may 
result  from  the  growth  of  a  near-by  city,  such  as  to  increase  the 
demand  for  bulky  and  perishable  products.  The  increased 
demand  results  in  increased  prices,  which  enables  these  crops 
to  crowd  out  their  competitors  in  a  larger  and  larger  territory 
surrounding  the  city.  The  farmer  should,  however,  be  very 
conservative  in  changing,  once  he  has  a  profitable  system 
established.  Changes  are  expensive.  They  involve  learning 
new  things,  buying  new  equipment,  and  meeting  new  prob- 
lems of  crop  conflict,  etc.  One  should  not  let  temporary  price 
fluctuations  move  him  to  change  his  plans.  But  he  should 
not  be   too   conservative;    if   changes  in  prices  result  from 


THE  CHOICE  OF   CROPS  5 1 

permanently  changed  conditions,  the  system  of  farming 
should  be  quickly  adjusted. 

The  change  hi  relative  prices  may  result  from  a  change  in 
the  number  of  uses  to  which  a  staple  crop  like  cotton  or  corn  is 
put,  or  it  may  result  from  an  expansion  of  the  area  available  for 
the  one  crop  without  a  like  expansion  of  the  area  available  for 
the  other.  The  expansion  of  cotton  production  in  Brazil 
or  west  central  Asia  or  India  might  reduce  the  price  of  cotton 
relatively  to  that  of  corn  so  that  corn  would  replace  cotton  on 
the  margin  of  the  cotton  belt  of  the  United  States.  It  will  be 
noted  that  the  stability  of  the  system  will  be  greater  in  the 
heart  of  the  corn  belt  and  in  the  heart  of  the  cotton  belt  than 
on  the  margin  between  these  two  regions. 

Fluctuations  in  the  rent  of  land  without  any  change  in  the 
relative  values  of  the  products  may  necessitate  a  change  in 
crops.  Suppose,  for  example,  that  the  rent  of  a  given  piece 
of  land  is  three  dollars  per  acre,  and  that  the  net  profit  per  acre 
is  five  dollars  when  the  land  is  devoted  to  corn,  and  that  the 
net  profit  is  twenty  dollars  per  acre  when  the  land  is  devoted  to 
sugar  beets ;  but  that  the  farmer  can  operate  thirty-five  acres 
of  corn  and  only  seven  acres  of  beets.  Then  he  could  win  one 
hundred  and  seventy-five  dollars  net  profit  by  producing  corn, 
and  only  one  hundred  and  forty  dollars  by  producing  beets. 
But,  suppose  the  rent  of  the  land  should  rise  to  five  dollars  per 
acre,  without  any  change  in  the  prices  of  the  products  or  in  the 
costs  of  production.  The  profits  per  acre  of  corn  would  then 
be  three  dollars,  and  that  of  an  acre  of  beets  would  be  eighteen 
dollars,  so  that  with  the  same  acreage  of  these  two  crops,  the 
total  net  profit  which  he  could  win  from  the  production  of  corn 
would  be  reduced  to  one  hundred  and  five  dollars,  while  that 
from  the  beets  would  have  been  reduced  to  one  hundred  and 
twenty-six  dollars  only.  In  this  hypothetical  case,  the  rise  in 
the  rent  would  result  in  a  subtraction  of  only  fourteen  dollars 
from  the  total  profits  of  the  beet  crop,  while  it  would  result  in  a 
reduction  of  the  profits  on  corn  of  seventy  dollars,  so  that  the 
crop  which  was  the  more  profitable  before  the  rise  in  the  rent 
would  become  the  less  profitable  as  a  result  of  the  rise  in  rent. 


52  AGRICULTURAL  ECONOMICS 

Changes  in  farm  labor  conditions  may  affect  the  choice  of 
farm  enterprises.  An  unusual  demand  for  laborers  in  the  city, 
or  the  withdrawal  of  men  from  the  farm  to  go  into  the  army, 
may  so  change  the  condition  in  a  given  community  that  it 
becomes  necessary  to  select  crops  which  require  much  less 
labor.  This  might  easily  result  in  a  change  from  an  intensive 
crop  like  tobacco  or  sugar  beets,  which  require  very  much 
labor  per  acre,  to  a  more  extensive  crop  like  corn,  which  re- 
quires much  less  labor  per  acre.  On  the  other  hand,  a  farmer 
with  a  growing  family  may  find  it  desirable,  as  his  children  be- 
come old  enough  to  help,  to  introduce  sugar  beets  or  some  other 
intensive  crop  on  his  farm  in  order  to  give  employment  to  the 
members  of  his  family. 

The  amount  of  available  capital  may  influence  the  farmer  in 
the  choice  of  crops.  If  he  has  little  capital  with  which  to  buy 
dairy  cows,  he  may  for  this  reason  produce  grain  to  sell  instead 
of  producing  feed  for  dairy  cows,  which  might  be  the  more 
profitable  if  he  had  the  capital  with  which  to  go  into  the 
dairy  business. 

The  characteristics  of  the  farmer,  his  likes  and  dislikes,  his 
previous  training  and  special  skill  in  particular  lines  of  produc- 
tion, may  very  greatly  affect  his  choice  of  enterprises.  That 
which  is  profitable  for  one  farmer  to  produce  in  a  given  com- 
munity may  not  be  profitable  to  another  because  of  the  fact 
that  the  second  farmer  may  lack  the  skill  required  in  carrying  out 
that  line  of  production. 

It  is  a  well-recognized  fact  that  the  different  crops  make 
different  demands  upon  the  soil.  For  this  reason,  the  crops 
which  are  associated  together  in  the  systems  of  rotation  should 
be  such  as  will  make  supplementary  demands  upon  the  soil's 
elements  of  fertility.  This  in  itself,  however,  is  not  a  safe 
guide  in  determining  which  plants  should  be  introduced  into 
the  field  system ;  for  it  might  lead  to  the  cultivation  of  the  less 
profitable  of  two  competing  crops,  and  thus  reduce  the  farmer's 
total  net  profit.  Yet  it  should  ever  be  kept  in  mind  that  if 
one  of  two  competing  crops  exhausts  the  soil  while  the  other 
adds  to  its  fertility,  this  fact  must  be  taken  into  account  when 


THE   CHOICE  OF   CROPS  53 

calculating  the  net  profit  which  these  crops  can  be  made  to 
yield.  The  crops  being  chosen  which  will,  one  year  with  another, 
enable  the  farmer  to  win  the  largest  net  profit,  they  should  be 
arranged  in  the  field  system  in  such  a  manner  as  best  to  supple- 
ment each  other  in  their  demands  upon  the  soil. 

It  has  been  the  purpose  of  this  chapter  to  outUne  the  think- 
ing which  the  farmer  needs  to  do  in  order  to  keep  his  system  of 
cropping  adjusted  to  the  conditions  of  the  market  in  such  a 
manner  as  to  yield  maximum  results.  There  are  other  reasons 
for  studjdng  market  conditions,  but  this  chapter  emphasizes 
one  most  important  occasion  for  keeping  posted  on  market 
prices.  Much  has  been  said  in  recent  years  about  farmers 
controlling  their  products  in  order  to  secure  fair  prices.  With- 
out going  into  the  question  of  organized  control,  attention  is 
here  called  to  the  fact  that  if  every  farmer  wall  produce  the 
crops  which  pay  best  on  his  farm,  this  in  itself  will  "  cut  out  the 
losses  and  let  the  profits  run  on,"  and  may  be  a  more  feasible 
plan  than  attempting  to  have  prices  artificially  raised  because 
a  given  farmer  is  producing  at  a  loss. 


CHAPTER  VI 
ECONOMICS   OF  THE  LIVE    STOCK  INDUSTRY 

There  are  certain  crops  such  as  cotton,  tobacco,  and  flax 
which  are  always  intended  for  the  market  in  their  native  form ; 
there  are  many  other  crops,  such  as  the  grains  and  the  hay  and 
forage  crops,  which  may  be  sold  in  their  native  form  or  trans- 
formed by  the  farmer  into  animal  products;  and  there  are 
many  other  products  of  the  farm,  such  as  soft  corn,  corn  fodder, 
second  growth  on  grain  fields  and  meadows  and  the  grass 
growing  on  land  not  suited  for  tillage  or  hay  crops,  which  are 
not  salable  in  their  original  form,  but  which  may  be  converted 
into  valuable  products  by  means  of  live  stock. 

No  question  arises  regarding  the  utilization  of  the  first  and 
the  third  of  these  three  classes  of  products,  but  in  case  of  the 
second  class  the  farmer  has  ever  before  him  the  problem  of 
determining  whether  the  largest,  long-time  average  net  profit 
can  be  obtained  by  selHng  or  by  feeding  these  crops.  The 
proper  solution  of  this  question  is  determined  by  the  relative 
prices  of  the  crops  and  the  live  stock  products. 

One  factor  ever  to  be  kept  in  mind  in  counting  the  profits  of 
the  live  stock  industry  is  the  value,  as  fertilizer,  of  the  manure, 
which  is  a  very  important  by-product  of  this  industry.  This 
element  is  usually  underestimated  in  a  new  country,  but  in 
the  older  countries,  where  commercial  fertilizers  have  long  been 
necessary  if  the  farmer  would  secure  the  largest  net  profit  in 
the  production  of  field  crops,  full  value  must  be  given  to  this 
by-product. 

Charles  F.  Curtiss,  of  the  Iowa  Agricultural  College,  says :  ^ 
"  Maintenance  of  fertiUty  is  secured  by  rotation  of  crops,  by 

*  From  a  paper  entitled  "  Economic  Functions  of  Live  Stock,"  read  before  the 
Economic  Section  of  the  A.  A.  A.  S.,  St.  Louis,  December,  1903. 

S4 


'economics  of  the  live  stock  industry        55 

chemical  fertilizers,  and  by  physical  and  bacteriological  methods ; 
but  by  none  of  these  has  the  virgin  strength  of  the  soil  been 
maintained  over  long  periods  except  as  plant  production  has 
been  associated  with  animal  husbandry.  By  selling  dairy 
products  in  the  form  of  butter  and  cheese,  and  restoring  the 
by-products  by  feeding  the  skim  milk,  buttermilk,  and  whey, 
we  take  from  the  soil  but  one-tenth  of  the  fertility  lost  by  a 
grain  crop.  ...  If  fertilizing  material  must  be  bought 
for  the  farm,  it  can,  under  all  ordinary  conditions,  be  bought  in 
vastly  cheaper  form  as  feedstufe  and  utiKzed  as  such,  and  the 
residue  applied  to  the  soil,  than  by  purchasing  fertiUzers  out- 
right. The  very  best  of  fertilizers  are  often  obtained  in  this 
way  without  any  direct  outlay.  The  use  of  feedstuffs,  rich  in 
fertility,  may  even  return  a  handsome  profit  as  a  separate 
proposition,  and  thus  fertilizing  constituents  come  on  to  the 
farm  under  most  advantageous  circumstances.  The  British  and 
other  European  farmers  buy  large  quantities  of  our  flaxseed 
and  corn  by-products.  They  figure  that  they  are  the  gainers, 
even  if  they  do  not  make  any  profit  on  their  feeding  operations 
with  these  products,  and  they  are.  Until  recently  the  packing- 
house by-products,  including  dried  blood  and  tankage  in  various 
forms,  have  practically  all  gone  direct  to  the  land  as  fertilizers. 
To-day  these  products  are  serving  a  most  important  purpose 
as  feedstuffs,  and  the  time  is  near  at  hand  when  practically 
every  pound  of  this  material  will  first  be  utilized  as  stock 
food,  and  later  returned  to  the  soil.  The  returns  are  so  much 
greater  and  so  much  more  economical  in  this  way  as  to  put 
the  purely  commercial  fertilizer  farmer  out  of  business  in  the 
space  of  a  few  years  at  the  outside,  where  other  conditions  are 
similar." 

The  feeding  of  grain,  hay,  and  fodder  to  live  stock  is  an  effec- 
tive means  of  converting  these  crops  into  products  of  higher 
specific  value,  which  will  better  stand  the  costs  of  transportation 
to  distant  markets.  "  Cattle  and  hogs  not  only  convert,  but 
also  condense,  Indian  corn  (maize).  They  enable  it  to  be  raised 
profitably  in  regions  too  far  removed  from  the  markets  of  the 
country  to  be  transported  in  that  form.     By  condensing  the 


56  AGRICULTURAL  ECONOMICS 

corn  to  one-fifth  or  one-sixth  of  its  bulk  and  weight,  and  re- 
ducing the  cost  of  transportation  in  something  Hke  a  similar 
proportion,  the  possibility  is  secured  of  raising  corn  in  regions 
situated  thousands  of  miles  from  the  market  at  which  the  corn 
products,  or,  what  is  practically  the  same,  the  pork  and  beef, 
are  consumed." 

Indian  corn  is  largely  consumed  on  the  farms  where  it  is 
produced.  Four  out  of  five  of  the  corn  producers  of  the  United 
States  feed  their  entire  crop.  From  80  to  82  per  cent  of  the 
corn  is  consumed  on  the  farms  where  produced,  and  much  of 
that  sold  is  consumed  on  other  farms.  About  one-fourth  of 
the  oats  is  sold  from  the  farms  where  grown,  and  nearly  nine- 
tenths  of  the  hay  and  coarse  food  is  consumed  on  the  farms  where 
grown.  The  percentages  of  these  crops  sold  varies  greatly  in 
the  different  parts  of  the  country.  Illinois  leads  in  the  sale  of 
both  oats  and  corn.  The  relative  importance  of  Illinois  as  a 
region  from  which  feedable  crops  are  sold  is  shown  in  the  Thir- 
teenth Census,  Vol.  V,  map  before  page  561,  which  shows  the 
receipts  from  sales  of  feedable  crops  in  1909.  Twenty-one 
counties  in  east  central  Illinois  show  receipts  from  feedable 
crops  representing  46.7  per  cent  of  the  total  value  of  all  cereals 
produced.  Corn  and  oats  are  the  principal  crops  produced 
in  this  region.  There  is  no  other  region  in  the  United  States 
where  feedable  crops  are  so  largely  sold.  In  the  state  of  Iowa, 
Illinois's  closest  competitor  as  a  corn  and  oat  state,  the  value  of 
feedable  crops  sold  represents  25  per  cent  of  the  value  of  all 
cereals  produced. 

There  are  several  reasons  for  this  difference  in  the  type  of 
farming  in  central  Illinois  and  the  remainder  of  the  corn-oats 
belt,  but  distance  from  the  market  is  certainly  a  very  important 
factor.  Chicago  is  the  greatest  corn  market  in  the  United 
States,  and  Milwaukee  and  Peoria  rank  high  among  the  minor 
markets. 

The  following  table  shows  the  prominence  of  Chicago  as  a 
market  for  both  corn  and  oats  for  the  year  1914.  It  will  be 
seen  that  the  receipts  at  Chicago  were  three  and  one  half  times 
that  of  Omaha,  the  closest  competitor. 


ECONOMICS   OF  THE   LIVE   STOCK   INDUSTRY 


57 


TABLE    I 

Receipts  of  Corn  and  Oats  at  the  Primary  Markets  for  the 
Year  1914 


Chicago    . 
Minneapolis 
St.  Louis  . 
Milwaukee 
Kansas  City 
Omaha 
Peoria .     . 
Toledo 
Detroit     . 
Cincinnati 


Corn 
(bu.) 


106,600,000 

12,260,000 

17,106,000 

18,338,000 

23,173,000 

30,005,000 

14,520,000 

4,310,000 

3,349,000 

8,468,000 


Oats 
(bu.) 


138,400,000 

22,215,000 

24,945,000 

26,792,000 

9,258,000 

16,951,000 

12,926,000 

3,586,000 

3,998,000 

5,958,000 


Nearly  all  of  the  com  and  oats  shipped  into  Chicago  arrives 
over  the  railways  extending  west  and  southwest  from  Chicago, 
whereas  practically  all  these  grains  shipped  from  Chicago  go  over 
eastern  railways  or  by  lake.  This  implies  that  the  demand  is  in 
Chicago  and  east  of  Chicago,  hence  the  advantage  of  this  cen- 
tral Illinois  area  as  one  in  which  to  grow  corn  and  oats  for  the 
market. 

So  far  as  the  writer  has  been  able  to  ascertain,  the  freight 
rate  per  hundred  pounds  of  hogs  in  carload  lots  from  the  various 
Iowa  and  Illinois  railway  stations  to  Chicago  is  about  twice 
that  for  corn  in  carload  lots  from  the  same  stations.  It  appears, 
also,  that  the  rates  for  these  commodities  are,  on  the  average, 
about  twice  as  high  from  the  Iowa  as  from  the  Illinois  stations. 
On  the  assumption  that  the  feeding  of  the  corn  to  hogs  and  cattle 
condenses  the  product  to  one-sixth  of  its  original  weight,  there 
would  be  a  saving  of  two-thirds  the  freight  by  sending  the  con- 
densed product.  But  the  saving  would  be  twice  as  great  for 
the  Iowa  farmers  as  for  the  Illinois  farmers,  and  as  the  price  of 
corn  rises,  the  point  where  it  would  be  more  profitable  to  ship 
than  to  convert  it  into  live  stock  products  would  be  reached  in 
Illinois  before  it  would  be  reached  in  Iowa. 


58  AGRICULTURAL  ECONOMICS 

In  comparing  the  relative  profitableness  of  crops  and  live 
stock,  especial  attention  should  be  given  to  the  alternative 
opportunities  for  the  employment  of  labor  and  to  the  extent 
to  which  crops  and  live  stock  compete  with  each  other  in  their 
demands  for  labor. 

The  live  stock  industry  comes  into  competition  to  some  extent 
with  the  production  of  field  crops.  The  farmer  who  feeds  and 
properly  looks  after  hogs,  cattle,  or  sheep  may  not  be  able  to 
spend  as  much  time  in  the  field  as  he  who  keeps  no  stock  of 
these  kinds.  The  dairy  industry  comes  more  into  competition 
with  the  crops  of  the  fields  than  do  the  other  live  stock  indus- 
tries. But  while  a  part  of  the  time  devoted  to  live  stock  must 
be  subtracted  from  the  time  which  can  be  spent  in  the  field,  yet, 
for  the  most  part,  the  live  stock  industry  is  supplementary,  in 
its  demands  for  labor,  to  the  other  branches  of  farming.  Live 
stock  requires  the  especial  attention  of  the  farmer  in  the  winter 
when  nothing  can  be  done  in  the  fields.  In  the  summer,  when 
the  farmer  is  busy  in  the  field,  much  of  the  live  stock  is  shifting 
for  itself  in  the  pasture,  and  there  is  usually  enough  time  when 
the  ground  is  too  wet  for  work  in  the  field,  to  permit  the  farmer 
to  give  the  needed  attention  to  the  Hve  stock  which  is  in  the 
pasture. 

To  the  extent  that  the  hve  stock  industry  is  supplementary, 
in  its  demands  upon  the  time  and  energy  of  the  farmer,  to  the 
production  of  farm  crops,  he  has  only  to  decide  whether  the 
additions  to  his  total  net  profit  resulting  from  the  transforma- 
tion of  the  various  crops  into  animal  products,  are  sufficient 
to  remunerate  him  for  the  extra  efforts  put  forth.  But  to  the 
extent  that  the  live  stock  industry  encroaches  upon  the  time  and 
energy  available  for  crop  production,  the  problem  of  determin- 
ing whether  to  sell  his  crops  or  convert  them  into  animal  prod- 
ucts presents  itself  in  practically  the  same  form  as  that  of 
selecting  crops  for  the  field  system.  The  general  principle  is 
simple,  "  Seek  the  largest,  long-time  average  net  profit,"  but 
the  practical  application  of  this  principle  is  especially  diflScult, 
because  of  the  limited  extent  to  which  these  two  lines  of  work 
come  into  conflict  with  each  other.     It  can  be  said,  however, 


ECONOMICS  OF  THE  LIVE  STOCK  INDUSTRY  59 

that  the  Hve  stock  industry  should  enable  the  farmer  to  win  as 
large  a  long-time  average  net  profit  as  he  could  secure  from 
other  sources,  and  enough  more  to  make  worth  while  the  extra 
effort  put  forth  when  he  could  have  found  employment  in  no 
more  productive  Hne  of  activity,  but  which  time  might  have 
been  spent  in  enjoying  the  products  of  his  labor  or  in  improving 
his  mind.  One  thing  to  consider  in  this  calculation  is  that  the 
crops  are  usually  much  larger  on  stock  farms  than  on  grain 
farms  of  equal  natural  fertility. 

Whether  a  given  farmer  should  keep  cattle,  hogs,  or  sheep, 
or  a  combination  of  these,  is  determined  by  the  kind  of  feed  at 
his  disposal,  the  relative  prices  he  can  secure  for  the  different 
classes  of  Hve  stock  products,  and  in  some  measure  upon  his 
personal  likes  and  disHkes.  The  corn  belt  is  preeminently  the 
hog  belt,  and  the  region  for  finishing  beef  cattle.  The  northern 
edge  of  the  corn  belt  is  the  principal  dairy  region,  partly  be- 
cause of  the  demands  made  by  cities  for  whole  milk;  partly 
because  the  corn  is  in  danger  of  being  damaged  by  frost  and  can 
be  more  safely  handled  through  the  silo. 

In  the  heart  of  the  corn  belt  the  farmer  finds  it  profitable 
to  put  a  full  day  in  the  cornfield.  The  labor  demands  made  by 
hogs  and  beef  cattle  are  almost  neghgible  during  the  time  of 
year  when  corn  is  demanding  attention,  whereas  the  dairy 
makes  a  heavy  drain  on  the  farmer's  time  throughout  the  sum- 
mer, and  hence  the  cow  is  relatively  a  stronger  competitor 
in  the  region  where  corn  is  a  less  profitable  crop  than  in  the 
heart  of  the  corn  belt. 

Cows  have  replaced  sheep  in  Vermont,  New  York,  north- 
eastern Ohio,  and  southern  Wisconsin.  Wool  production  has 
found  its  way  to  the  Rocky  Mountains.  The  high  specific 
value  of  wool  enables  this  grazing  industry  to  thrive  on  rough 
lands  at  great  distances  from  the  market,  hence  it  gives  place 
to  perishable  products  or  products  of  lower  specific  value  near 
the  markets  and  on  lands  suited  to  field  crops.  World-wide 
competition  has  been  an  important  factor  in  keeping  the  price 
of  wool  low,  and  in  discouraging  wool  production  in  most  parts 
of  the  United  States.     During  the  world  war,  conditions  were 


6o  AGRICULTURAL  ECONOMICS 

temporarily  changed  and  the  high  price  of  wool  stimulated  the 
sheep  industry. 

Horse  breeding  is  an  important  industry  throughout  the  corn 
belt  and  the  grazing  areas  of  Missouri  and  Kentucky.  Horses 
are  required  for  growing  corn,  but  are  required  to  work  hard  only 
a  few  months  in  the  year.  By  combining  horse  raising  and  corn 
growing,  the  horse  labor  cost  in  corn  production  is  greatly  re- 
duced. Even  in  the  central  Illinois  corn  area,  where  hogs  and 
cattle  have  practically  disappeared,  the  rearing  of  colts  is  an 
important  industry,  based  in  part  upon  the  great  amount  of 
unsalable  roughage  available  on  the  corn-oats  farm. 

The  individuals  of  any  class  of  live  stock  are  so  varied  that 
one  may  have  diflficulty  in  deciding  which  breed  or  which  quality 
to  keep.  "  The  best  are  most  profitable  "  is  a  saying  which 
helps  little.  The  problem  is  to  know  which  will  pay  best. 
What  is  best  in  dairy  cows  for  one  locality  may  not  be  the  best 
in  another.  The  cow  which  is  best  for  a  careful,  intelligent 
dairyman  may  be  poorest  for  a  careless,  ignorant  man  who 
keeps  cows.  This  is  true  primarily  because  the  superior  cows 
cost  more  money,  and  while  they  are  worth  more  to  the  superior 
dairyman,  they  are  worth  no  more  to  the  man  on  whose  farm 
all  stock  soon  come  to  look  like  scrubs. 

Some  cattle  are  excellent  for  beef  production  and  of  little 
use  as  dairy  animals.  Other  breeds  of  cattle  are  efficient  pro- 
ducers of  milk,  but  their  carcasses  have  little  value  as  human 
food.  Intermediate  between  these  extremes  are  found  a  few 
breeds  such  as  the  Holstein,  the  Ayrshire,  and  the  Brown 
Swiss  which  are  excellent  dairy  animals  and  produce  excellent 
veal  calves,  while  the  defective  cows  yield  large  quantities  of 
fairly  good  beef.  The  relative  merits  of  these  three  classes  of 
cattle  depend  upon  the  circumstances.  On  inferior  grazing 
lands,  where  the  herd  must  lead  a  migratory  fife  during  the 
summer,  and  where  labor  is  dear  and  land  cheap,  the  special- 
ized beef  type  usually  proves  most  profitable,  but  such  animals 
are  not  suited  to  a  city  milk  district,  where  the  price  of  the 
carcass  of  a  dairy  cow  is  not  to  be  ignored,  but  where  the  pri- 
mary consideration  is  a  large  flow  of  milk  of  acceptable  quality. 


ECONOMICS   OF  THE  LIVE  STOCK   INDUSTRY  6 1 

The  choice  between  the  extreme  dairy  type  and  the  cow  which 
produces  both  milk  and  meat  should  depend  upon  the  price  of 
meat.  In  a  country  where  great  quantities  of  high-class  beef 
are  produced  at  low  cost,  there  is  more  economic  reason  for  the 
highly  specialized  dairy  cow  than  in  a  country  where  beef  of 
any  kind  is  high.  In  other  words,  the  right  choice  of  breeds 
depends  upon  economic  conditions  which  are  ever  changing. 
Conditions  in  America  have  in  the  past  encouraged  highly 
specialized  beef  cattle  and  highly  speciaHzed  dairy  cattle.  It 
does  not  follow  that  this  will  be  true  in  the  future. 


CHAPTER  VTI 

MISCELLANEOUS    WORK    CORRELATED    WITH    CROP    AND 
LIVE  STOCK  ENTERPRISES 

There  are  many  odd  jobs  on  every  farm  which  are  here  classed 
as  miscellaneous  work  because  they  are  not  connected  directly 
with  any  of  the  important  crop  or  live  stock  enterprises.  For 
example,  the  repairing  of  old  fences,  the  building  of  new  fences, 
the  cutting  of  weeds  along  fences  and  ditches,  the  filling  of 
washes,  the  repair  of  buildings,  making  concrete  walks,  trim- 
ming trees  about  the  house,  making  posts,  cutting  stove  wood, 
improving  roads  about  the  farm,  etc.,  may  be  classed  as  mis- 
cellaneous work. 

This  class  of  work  has  sometimes  been  called  unproductive. 
This  characterization  arises  out  of  the  fact  that  even  though  all 
this  work  be  done  perfectly,  the  farm  will  yield  no  income 
without  the  crop  or  live  stock  enterprises.  Yet  the  crop  and 
live  stock  enterprises  cannot  long  be  carried  on  if  all  this  mis- 
cellaneous work  is  neglected.  It  is  better,  therefore,  to  call  this 
labor  indirectly  productive  rather  than  unproductive. 

One  of  the  most  important  problems  in  farm  management  is 
to  keep  the  indirectly  productive  labor  out  of  the  way  of  the 
directly  productive  labor  and  yet  get  it  done.  Just  to  the 
extent  that  crop  work  must  be  stopped  in  order  to  make  or 
repair  a  fence,  the  possibilities  of  profits  are  reduced.  The 
purpose  of  this  chapter  is  to  make  some  suggestions  which  may 
be  helpful  in  organizing  the  farm  work  in  a  manner  that  will 
tend  to  keep  the  proportion  of  time  on  directly  productive 
labor  at  a  maximum  and  arrange  to  get  the  miscellaneous  work 
done  when  no  directly  productive  labor  can  be  carried  on. 

The  experienced  farmer  usually  anticipates  his  need  for  fuel 
during  seasons  when  crop  work  demands  his  attention,  by  pro- 

62 


MISCELLANEOUS  WORK  63 

viding  a  large  pile  of  wood,  ready  for  the  cook  stove,  before  the 
frost  is  out  of  the  ground  in  the  spring.  He  likewise  anticipates 
his  need  for  fences  and  utilizes  the  time  after  the  frost  is  out  of 
the  ground  until  work  can  commence  in  the  field,  building  and 
repairing  fences.  Not  only  is  this  time  relatively  free  from 
conflicting  enterprises,  but  there  is  no  other  time  of  year  when 
a  post  can  be  set  with  so  httle  labor  as  in  the  loose,  moist  soil 
as  it  is  found  just  after  the  frost  is  out  of  the  ground.  The 
shiftless  farmer  who  neglects  this  opportunity  and  comes  to 
the  date  when  the  cattle  should  be  turned  into  the  pasture 
without  having  the  fences  in  repair  may  have  to  take  a  man 
and  team  out  of  the  cornfield  a  day  at  a  time  when  labor  on 
corn  is  worth  75  cents  an  hour,  to  do  work  which  might  have 
been  done  when  alternative  opportunities  would  pay  no  more 
than  10  cents  an  hour. 

Instances  might  be  multiplied  without  end  showing  how  the 
neglect  of  miscellaneous  work  when  time  is  available  results  in 
great  loss  to  the  farmer.  To  facilitate  getting  work  done  at  the 
most  opportune  time  the  following  classifications  of  work  have 
been  made : 

(A)  (i)  Work  which  must  be  done  at  a  definite  time. 

(2)  Work  which  may  be  done  any  time  within  a  wide  latitude. 

(3)  Work  which  is  often  postponed  indefinitely. 

(B)  (i)  Work  that  can  be  done  when  it  is  raining. 

(2)  Work  which  cannot  be  done  while  rain  is  falling,  but  can 

be  done  while  the  ground  is  wet. 

(3)  Work  requiring  dry  weather  and  land  dry  enough  to  work 

or  drive  over  (hauling  manure,  lime,  etc.). 

(C)  (i)  Work  which  cannot  be  done  while  ground  is  frozen. 

(2)  Work  which  can  be  done  while  ground  is  frozen. 

(3)  Work  which  can  be  done  when  ground  is  covered  with 

snow. 

A.  (i)  Feeding  and  milking  dairy  cows,  sowing  oats,  plant- 
ing corn,  the  cultivation  of  corn,  and  the  harvesting  of  the  oats, 
are  examples  of  work  which  will  suffer  if  not  done  at  the  right 
time.  The  farmer  who  neglects  his  cows  will  soon  have  no 
milking  to  do.    The  farmer  who  delays  sowing  oats  until  the 


64  AGRICULTURAL  ECONOMICS 

warm,  dry  days  of  early  summer  finds  his  harvest  Hght,  and  he 
who  delays  the  cultivation  of  his  corn  for  one  week  after  it  is 
large  enough  to  plow  will  have  a  weedy  field  and  a  poor  crop. 
Success  in  farming  demands  that  all  other  classes  of  work  be 
kept  out  of  the  way  of  work  which  by  nature  must  be  done  at 
a  definite  time  to  secure  best  results.  This  class  of  work  is 
often  called  rush  work,  not  because  it  should  be  done  poorly, 
but  because  the  profits  of  the  farm  depend  upon  the  doing  a 
maximum  of  this  work  and  doing  it  well.  In  rush  seasons  one 
should  work  the  maximum  day,  expecting  to  relax  when  the 
rush  is  over,  but  when  this  class  of  work  demands  attention 
one  should  "  do  nothing  to-day  which  can  as  well  he  put  of  until 
to-morrow,'"  in  order  to  devote  a  maximum  of  effort  to  the  rush 
work. 

(2)  Work  which  may  be  done  any  time  within  a  wide  lati- 
tude requires  the  very  especial  attention  of  the  farmer,  because 
the  time  comes  when  this  work  cannot  be  put  off  longer  and  it 
may  crowd  the  labor  which  can  be  done  only  at  a  definite  time. 
For  example,  seed  corn  may  be  tested  and  shelled  at  any  time 
after  it  is  thoroughly  cured,  but  if  neglected  until  the  fields  are 
ready  to  plant,  this  most  profitable  work  of  the  farm  may  be 
delayed.  It  takes  a  better  manager  to  perform  all  these  tasks 
in  seasons  when  there  is  no  rush  work  than  it  does  to  concentrate 
on  rush  work,  for  the  season  calls  the  farmer  to  the  task  which 
must  keep  pace  with  nature,  while  it  is  only  the  power  of  the 
mind  which  takes  thought  of  future  needs  and  anticipates  these 
wants  by  making  the  needed  preparation.  The  rule  to  follow 
when  there  is  no  rush  work  pressing  for  immediate  attention 
and  which  must  be  enforced  with  methodical  and  industrious 
habits  if  the  farmer  is  to  rank  high  as  a  manager  is  found  in  the 
old  phrase  "  Put  of  nothing  until  to-morrow  which  can  he  done 
to-day, ^^  in  order  to  be  free  to  devote  a  maximum  of  time  to  the 
rush  work  when  it  comes. 

(3)  There  is  much  work  which  should  be  done  in  order  to 
keep  the  farm  looking  tidy  and  to  make  life  on  the  farm  more 
livable  which  is  often  left  undone  indefinitely.  Many  a  farmer 
has  neglected  beautifying  his  lawn  because  it  is  not  connected 


MISCELL.\NEOUS  WORK  65 

in  a  vital  way  with  the  money  profits  of  the  farming  operations. 
In  considering  work  of  this  class  careful  attention  should  be 
given  to  the  fact  that  the  farm  is  capable  of  providing  for  the 
direct  satisfaction  of  many  wants  without  the  intervention  of 
money,  and  that  the  importance  of  these  wants  should  be  com- 
pared with  those  to  be  satisfied  by  the  expenditure  of  money, 
before  deciding  to  neglect  these  direct  satisfactions  to  earn 
more  cash  profits.  Many  of  these  wants  can  be  satisfied,  how- 
ever, without  reducing  the  cash  income,  by  planning  the  work 
more  carefully. 

B.  (i)  The  second  classification  is  based  upon  weather  and 
soil  conditions  mth  respect  to  humidity.  There  is  a  great 
variety  of  tasks  which  can  be  done  under  shelter  and  which 
should  as  nearly  as  possible  be  cared  for  on  rainy  days.  Shell- 
ing seed  corn,  mending  the  harness,  and  repairing  tools  are 
typical  examples.  It  is  necessary  to  have  some  device  to  assist 
one  in  thinking  of  these  tasks  when  the  rainy  day  arrives  or 
one  will  let  these  golden  opportunities  slip  unimproved.  The 
writer  knows  a  farmer  who  keeps  a  notebook  in  his  pocket  in 
which  he  jots  down  the  tasks  which  can  be  performed  on  a  rainy 
day.  He  calls  this  his  rainy  day  book.  This  enables  ham 
quickly  to  plan  the  work  for  a  rainy  day  when  it  comes,  and  to 
choose  the  tasks  wdth  attention  to  the  date  prior  to  which  they 
must  be  performed  or  come  in  conflict  with  rush  work.  The 
rule  is  to  push  rainy  day  work  when  it  is  raining,  and  to  do  no 
rainy  day  work  when  it  is  not  raining,  if  there  is  "  outside  " 
work  to  be  done. 

(2)  There  is  a  large  class  of  tasks  which  may  be  called  "  wet 
land  work."  In  this  class  falls  the  cutting  of  weeds  in  the  fence 
rows,  the  repairing  of  fences,  the  cleaning  up  of  the  wood  lot, 
the  repair  of  buildings,  the  laying  of  concrete  walks,  the  digging 
of  trenches  for  laying  water  pipes  from  the  well  to  the  house 
and  to  the  barn,  and  a  score  of  other  tasks  which  will  crowd 
themselves  upon  the  farmer's  mind  as  he  considers  the  things 
he  wants  done.  The  rule  is  to  push  the  wet  land  work  when 
the  land  is  not  dry  enough  to  work  and  do  no  work  of  this  class 
when  there  is  field  work  which  can  be  done. 


66  AGRICULTURAL  ECONOMICS 

(3)  The  work  which  requires  dry  land  and  dry  weather 
comprehends  the  greater  number  of  field  operations  which 
must  be  performed  at  a  definite  time,  hence  the  importance  of 
keeping  this  time  free  for  these  activities.  The  percentage  of 
time  capable  of  being  used  in  the  field  which  is  actually  used 
for  this  purpose  is  a  measure  of  one's  ability  as  a  manager. 

C.  The  third  classification  is  based  upon  the  condition  of  the 
ground  with  respect  to  frost  and  snow. 

(i)  The  work  which  cannot  be  done  while  the  ground  is 
frozen  comprehends  a  large  share  of  the  field  operations.  Some 
of  the  activities  which  one  is  in  danger  of  postponing  too  long 
and  for  this  reason  suffer  loss  are  potato  digging,  beet  Hfting, 
and  fall  plowing.  Every  farmer  should  be  informed  as  to  the 
time  of  year  the  ground  usually  freezes  sufficiently  to  stop  these 
fines  of  work  and  bend  every  effort  to  having  all  work  of  this 
nature  out  of  the  way  before  chat  date.  The  fact  that  the 
permanent  freeze  is  some  years  much  later  than  the  ordinary, 
should  not  be  used  as  a  reason  for  delay.  The  good  manager 
keeps  step  with  nature,  but  tries  to  keep  considerably  ahead 
of  the  date  when  a  given  task  cannot  be  performed.  The  early 
dates  when  the  ground  has  frozen  enough  to  stop  plowing 
should  be  held  in  mind  rather  than  the  later  dates.  The  gen- 
eral rule  in  autumn  is  "  work  which  cannot  be  done  when  the 
ground  is  frozen  should  take  precedence  over  work  which  can 
be  done  later."  Fall  plowing  should  be  looked  after  first  and 
corn  husking  afterwards  because  the  husking  can  be  done  when 
the  ground  is  frozen  and  the  plowing  cannot. 

(2)  In  the  corn  belt,  the  husking  of  corn  stands  out  as  an 
important  task  which  is  performed  when  the  ground  is  frozen 
but  which  should  be  completed  before  a  heavy  snow  falls.  It 
is  the  fear  of  snow  and  severely  cold  weather  that  impels  the 
corn  farmer  to  bend  every  energy  to  clear  the  field  of  corn 
before  the  first  of  December,  or  some  other  date  fixed  by  the 
experience  of  the  community  as  the  time  when  there  is  danger 
of  weather  which  will  stop  the  work. 

(3)  There  are  many  tasks  which  can  be  done  in  winter  and 
while  the  ground  is  covered  with  snow.     Examples  are  :  hauling 


MISCELLANEOUS  WORK  67 

manure,  spreading  lime,  hauling  and  preparing  stove  wood, 
hauling  and  storing  ice,  visiting  the  herds  of  successful  farmers, 
attending  the  farmers'  course,  reading  books  on  the  culture  of 
crops,  on  the  breeding,  care,  and  feeding  of  live  stock,  and  on  the 
best  methods  of  marketing  farm  produce.  This  is  the  time  of 
year  for  the  farmer  to  work  a  short  day  and  take  time  for  self- 
improvement. 


CHAPTER  VIII 
WHAT  SHOULD   THE   NATION   PRODUCE? 

From  the  standpoint  of  the  farmer,  the  guiding  principle  in 
the  organization  of  a  farm  is  to  seek  the  largest  net  profit ;  but 
there  is  another  point  of  view  than  that  of  the  farmer,  and 
that  is  the  point  of  view  of  the  statesman.  Since  not  only  the 
farmer,  but  every  one  else,  is  interested  in  agriculture,  the  ques- 
tion arises,  are  the  interests  of  the  country  as  a  whole  best 
conserved  when  each  farmer  follows  tenaciously  his  own  self- 
interest  and  succeeds  in  gaining  the  largest  net  profits  in  return 
for  the  effort  which  he  expends  in  agricultural  production? 
There  may  be,  at  certain  points,  a  conflict  between  the  narrower 
and  the  broader  interests.  In  this  case  we  are  confronted  with 
the  problem  of  determining  whether  the  individual  or  the 
general  interest  should  be  promoted.  To  the  extent  that  the 
greatest  good  to  the  greatest  number  demands  that  the  general 
or  social  interests  be  served,  it  falls  within  the  domain  of  our 
subject  to  propose  laws  which  will  limit  the  free  action  of  in- 
dividuals in  such  a  manner  as  to  promote  the  highest  interests 
of  society  as  a  whole. 

But  while  human  welfare  or  the  greatest  good  to  the  greatest 
number  has  long  been  recognized  as  the  standard  by  which 
every  law  or  custom  should  be  accepted  or  rejected,  this  prin- 
ciple is  so  abstract  that  men  may  be  fully  agreed  upon  its  ac- 
ceptance as  their  standard,  and  yet  hold  exactly  opposite 
opinions  as  to  the  desirability  of  a  particular  measure.  The 
statesman  needs  a  more  concrete  standard  which  may  be  used 
with  safety  in  his  efforts  to  set  proper  limits  to  the  free  action 
of  farmers  and  of  those  with  whom  they  have  economic  rela- 
tions, in  the  pursuance  of  their  daily  toils. 

Should  the  maximum  in  quantity  of  farm  products  be  the 
goal  of  the  agricultural  statesman  ?    The  phrase,  "  More  food 

68 


WHAT  SHOULD  THE  NATION  PRODUCE?  6g 

this  year  is  patriotism  "  has  at  times  been  interpreted  in  a  way 
which  suggests  that  some  leaders  in  the  promotion  of  agricul- 
ture would  make  quantity  of  product  the  goal  in  view.  If 
quantity  of  product  in  pounds  or  bushels  were  the  goal  in  pro- 
duction, the  agriculture  of  this  country  would  be  very  different. 
We  would  produce  more  potatoes  and  other  bulky  crops,  only 
to  find  the  demands  of  the  consumers  too  small  for  the  supply 
of  these  articles,  and  a  part  of  the  supply  wasted. 

Human  desire  is  the  starting  point  in  economic  considerations, 
and  human  welfare  is  the  end  in  \'iew  in  economic  legislation. 
To  the  extent  that  human  desires  are  wholesome,  values  may 
be  made  the  basis  of  determining  what  a  nation  should  produce, 
for  human  desires  reflect  themselves  in  values.  The  highest 
value  of  the  productions  of  a  country  has,  therefore,  been  set  forth 
as  a  practical  economic  ideal  for  the  statesman.  It  has  been  said 
that  "  the  prosperity  of  a  nation  is  in  proportion  to  the  value 
of  its  productions."  ^  This  is  the  economic  ideal  which  was 
set  forth  by  their  leaders  as  the  aim  and  the  end  of  the  Patrons 
of  Husbandry  in  their  efforts  to  promote  the  interests  of  agri- 
culture. 

To  this  principle,  as  an  economic  ideal,  it  may  be  objected 
that  legislation  may  be  of  such  a  character  as  to  increase  the 
value  of  the  farm  products  of  a  country  and  at  the  same  time 
not  improve  the  economic  well-being  of  the  people  of  the  coun- 
try as  a  whole.  It  is  quite  conceivable,  for  example,  that  duties 
on  imports  may  be  so  levied  as  to  increase  the  total  value  of  the 
farm  products  of  a  country  without  increasing  the  prosperity 
of  the  nation. 

It  is  necessary,  in  order  that  this  national  ideal  shall  be  at- 
tained, that  the  labor  and  capital  of  a  country  be  properly 
distributed  among  the  various  lines  of  economic  activity.  The 
labor  and  the  capital  of  a  nation  should  be  so  distributed  among 
the  various  industries  that  the  portion  of  these  factors  which 
is  employed  under  the  most  unfavorable  circumstances  shall 
be  equally  productive,  socially  considered,  in  all  industries. 
The  necessity  of  this  proper  adjustment  of  the  productive 

1  See  the  preamble  of  the  Constitution  of  the  Patrons  of  Husbandry. 


70  AGRICULTURAL  ECONOMICS 

forces  should  ever  be  kept  in  mind  in  the  discussion  of  the 
movements  of  population  from  country  to  city,  or  vice  versa. 

When  the  prodiictive  forces  are  properly  distributed  among 
the  various  lines  of  production,  and  where  the  relative  values 
of  products  are  not  to  be  directly  affected  by  public  action,  it 
would  seem  that  a  just  and  practical  ideal  to  be  held  in  mind 
by  the  statesman  when  passing  judgment  upon  what  crops 
should  be  grown,  the  management  of  live  stock,  the  intensity 
of  culture,  the  size  of  farms,  and  the  laws  which  limit  and  define 
farmers'  rights  in  their  relations  to  each  other,  to  their  land- 
lords, to  laborers  which  they  employ,  and  to  those  to  whom 
they  sell  their  products,  would  be  the  highest  long-time  average 
value  of  the  farm  products  of  the  country  as  a  whole. 

We  wish  to  mark  out  clearly  the  distinction  between  the  social 
ideal  and  the  ideal  of  the  individual.  The  individual  seeks  the 
largest  net  profits.  He  desires  to  have  that  share  of  the  product 
which  is  left  to  him,  after  paying  what  is  necessary  to  engage 
the  other  factors  of  production,  as  large  as  possible.  Where 
the  personal  interest  of  the  farmer  does  not  extend  to  all  of  the 
factors  of  production,  conflicting  interests  are  certain  to  arise, 
as  between  the  landlord  and  the  tenant,  or  the  employer  and 
the  employee.  While  the  farmer  is  interested,  personally,  in 
having  his  own  share  of  the  produce  large  in  proportion  to  the 
efforts  which  he  puts  forth,  the  statesman  should  be  interested 
equally  in  having  the  returns  to  all  the  factors  of  production 
as  large  as  possible. 

The  conflict  between  the  national  point  of  view  and  that  of  the 
farm  operator  may  relate  to  the  choice  of  crops,  the  intensity  of 
culture,  the  character  of  the  live  stock  industry,  the  control  of  weeds, 
the  control  of  disease,  the  quality  of  the  products  sold,  and  the 
conservation  of  the  land  and  the  economic  and  social  welfare  of 
all  classes.  When  viewed  from  the  national  standpoint,  it  is 
not  the  return  to  any  one  factor  in  particular,  but  the  sum  of 
the  returns  to  all  the  factors  which  should  be  of  vital  interest 
to  the  statesman.  With  the  limitations  which  have  been  suggested, 
the  highest  long-time  average  value  of  the  total  product  of  the  agri- 
cultural industry  may  be  looked  upon  as  the  goal,  when  agriculture 


WHAT  SHOULD  THE  NATION  PRODUCE?  71 

is  viewed  from  the  standpoint  of  maximum  efficiency  in  produc- 
tion for  the  nation  as  a  whole. 

But  maximum  efficiency  in  production  may  not  be  the  sole 
aim  of  a  nation.  National  defense  may  seem  at  times  to  be  so 
important  as  to  make  it  desirable  to  reduce  the  efficiency  of 
production  in  order  that  the  nation  be  self-sufficing  to  an 
adequate  degree.  This  may  be  the  most  profitable  thing  to 
do  with  a  view  to  meeting  the  national  needs  in  times  of  inter- 
national strife  when  international  commerce  is  extremely 
hazardous. 

The  problem  then  becomes  that  of  ascertaining  to  what  ex- 
tent a  nation  should  produce  everything  it  needs  as  nearly  as 
possible  and  to  what  extent  it  should  produce  those  articles 
which  enable  it  to  secure  the  maximum  free  competitive  values 
and  depend  upon  international  trade  to  provide  the  great 
variety  of  articles  which  can,  in  times  of  peace,  be  secured 
from  abroad  more  cheaply  than  they  can  be  produced  at  home. 
The  answer  to  this  question  depends  upon  the  national  ideal 
and  the  progress  of  civilization  in  the  direction  of  protecting 
international  trade. 

To  the  extent  that  civilized  nations  desire  to  live  in  peace 
with  one  another,  making  mutual  concessions  from  time  to  time 
and  recognizing  one  another's  rights  and  the  mutual  benefits 
to  be  derived  from  the  exchange  of  commodities,  advantage 
may  be  taken  of  the  benefits  of  division  of  labor  among  nations 
and  the  resulting  international  commerce.  On  the  other  hand, 
if  strong  nations  are  unwilling  to  enter  this  world  comity, 
and  insist  on  extreme  nationalism  and  stand  ready  to  encroach 
upon  the  rights  of  others  upon  land  and  upon  sea,  it  may  be- 
come necessary  to  adopt  an  economic  pohcy  very  different  from 
the  one  which  would  be  most  productive  if  a  world  economy 
were  practicable. 

Under  the  system  of  extreme  national  economy,  where  the 
nation  must  be  self-sufficing  in  the  primary  necessities  of  Hfe, 
industry,  and  war,  many  of  the  advantages  of  modern  civiliza- 
tion may  be  lost.  Luxuries  may  be  secured  from  abroad  in 
times  of  peace  and  dispensed  with  in  times  of  war.     A  national 


72  AGRICULTURAL  ECONOMICS 

system  may  not  only  point  to  the  production  within  the  nation 
of  the  entire  supply  of  the  necessities  of  life  and  the  munitions 
of  war,  but  may  result  in  an  agricultural  policy  which  looks  to 
the  production  of  a  large  number  of  effective  soldiers  rather  than 
a  maximum  of  agricultural  products.  In  this  way  the  size  of 
farms,  the  tenure  of  land,  and  the  credit  system  may  all  be 
modified  with  a  view  to  maintaining  a  very  much  larger  number 
of  farm  families  than  would  otherwise  exist. 

The  larger  the  country  and  the  greater  the  diversity  of  soil 
and  cKmate  found  within  her  borders,  the  smaller  will  be  the 
economic  loss  in  adopting  a  national  system  of  agriculture. 
For  this  reason  the  United  States  would  be  in  a  strong  position 
compared  with  other  nations  under  the  necessity  of  a  self- 
sufficing  national  economy.  Yet  the  United  States  may  well 
afford  to  spend  millions  annually  in  maintaining  friendly  inter- 
national relations  rather  than  undertake  to  live  an  isolated 
economic  life. 

A  study  of  the  exports  and  the  imports  of  the  United  States 
will  give  basis  for  some  conclusions  regarding  the  way  in  which 
American  agriculture  would  be  affected  if  a  complete  national 
system  were  adopted  with  respect  to  the  production  at  home 
of  all  the  agricultural  products  used  in  our  homes  and  in  the 
maintenance  of  our  national  life. 

The  agricultural  imports  may  be  classified  as  follows  on  the 
basis  of  the  possibility  of  producing  the  supply  at  home : 

I.  Of  our  agricultural  imports  some  cannot  under  natural 
conditions  be  produced  in  the  United  States.  There  is  a  lack 
of  proper  soil  and  climate  which  makes  it  physically  impossible 
to  grow  the  product  without  providing  artificially  the  necessary 
conditions.  For  example,  rubber,  cocoa,  and  bananas  are 
tropical  products  which  play  an  important  part  in  our  life, 
and  which  we  would  probably  do  without  if  we  could  not  carry 
on  commerce  with  South  and  Central  America.  Coffee  may 
belong  in  this  same  class,  though  it  has  been  claimed  that 
rather  large  potential  coffee  areas  exist  along  our  southern 
border.  Where  these  articles  are  luxuries,  we  may  be  better 
off  in  times  of  war  without  them,  but  where  they  are  important 


WHAT  SHOULD  THE  NATION  PRODUCE?  73 

in  our  commerce  and  industry,  as  for  example  the  raw  material 
for  making  binder  twine,  the  probability  of  having  the  supply 
cut  off  in  times  of  war  should  be  carefully  considered,  and,  if 
the  case  be  serious  enough  to  justify  the  action,  the  production 
of  substitutes  should  be  stimulated,  or  great  quantities  held  in 
storage  with  which  to  meet  emergencies. 

2.  Other  agricultural  products  which  are  now  largely  im- 
ported could  be  produced  in  the  United  States  in  great  abun- 
dance, but  the  natural  conditions  for  their  production  are  rela- 
tively less  favorable  than  in  foreign  countries.  Hemp,  jute, 
and  lemons  may  be  given  as  examples.  If  world  peace  can  be 
assured  as  a  condition  of  a  world  economy,  articles  of  this  class 
may  well  be  brought  from  abroad ;  but  if  peace  is  very  uncertain, 
the  necessities  in  this  class  may  better  be  produced  at  home  at 
a  greater  cost. 

3.  Some  of  our  agricultural  imports  could  be  produced  in 
the  United  States  in  quantities  sufficient  to  take  the  place  of 
the  imported  supply,  and  the  natural  conditions  are  as  favorable 
for  their  growth  in  this  country  as  in  foreign  countries,  and  yet 
it  is  profitable  in  times  of  world  peace  to  import  them  from 
abroad  rather  than  produce  the  whole  supply  at  home.  This 
may  be  true  (c)  because  the  land  which  is  well  suited  for  the 
production  of  a  given  imported  crop  can  be  used  more  profitably 
in  the  production  of  some  other  crop  which  does  not  thrive  in 
the  foreign  country  from  which  we  import,  ib)  Again,  this 
may  be  true  because  labor  and  capital  are  more  abundant  and 
wages  and  interest  are  lower  in  the  foreign  competing  country. 
The  sugar  beet  may  be  taken  as  an  example  of  a  crop  which 
thrives  as  well  in  parts  of  the  United  States  as  in  Europe  and 
which  cannot  be  produced  with  profit  in  the  United  States 
without  a  bounty  or  a  protective  tariff.  Both  of  the  above 
conditions  are  operative  in  making  beets  unprofitable  in  parts 
of  the  United  States.  There  are  large  areas  with  suitable  soil 
and  climate  for  the  production  of  beets  where  corn  or  tobacco 
are  competing  crops.  These  crops  do  not  compete  in  the  beet 
regions  of  northwestern  Europe.  Hence,  under  free  competitive 
conditions,  it  pays  better  to  import  sugar  than  to  produce  it 


74  AGRICULTURAL  ECONOMICS 

in  the  com  belt  of  the  United  States.  Outside  of  the  corn  belt, 
especially  in  California,  Colorado,  Utah,  and  Idaho,  the  question 
is  less  a  matter  of  competing  crops  than  it  is  a  matter  of  high 
cost  of  labor,  yet  in  these  regions  beets  compete  with  potatoes 
and  alfalfa.  Raw  silk  and  tea  are  good  examples  of  crops  which 
are  practically  excluded  from  being  produced  in  the  United 
States  because  of  the  wide  difference  in  the  cost  of  labor  in  the 
United  States  and  in  eastern  Asia.  The  first  of  these  reasons 
for  finding  it  more  profitable  to  buy  than  to  produce  is  a  perma- 
nent one.  It  is  based  upon  natural  forces.  The  second  is 
based  partly  upon  differences  in  the  density  of  the  population 
in  different  parts  of  the  earth,  and,  hence,  being  a  social  condi- 
tion is  subject  to  change. 

4.  Some  articles  can  be  produced  profitably  in  limited  quan- 
tities but  not  in  sufficient  abundance  to  satisfy  the  demand  of 
the  nation  because  of  the  limited  areas  on  which  they  prove  to 
be  the  strongest  competitors  for  land,  labor,  and  equipment. 
Wool  is  an  example.  Wool  is  the  most  profitable  product 
which  can  be  produced  in  some  of  the  high,  dry  areas  of  the 
Rocky  Mountain  region,  and  in  some  other  regions  where  rough 
grazing  lands  are  abundant  and  where  the  dairy  cow  is  not  a 
strong  competitor.  Sheep  may  also  find  a  profitable  place  in 
small  numbers  on  the  general  farm,  but  so  long  as  cheap  wool 
may  be  secured  from  South  America  and  Austraha,  it  may  be 
that  the  greater  part  of  the  supply  can  be  imported  more  cheaply 
than  produced  at  home.  This  has  proved  true  even  when  a 
protective  tariff  favored  the  home  grower  of  wool. 

5.  Some  articles  can  be  produced  profitably  in  certain  qualities, 
but  not  in  all  qualities  desired  by  the  people  of  the  United  States. 
Cotton,  for  example,  is  imported,  not  because  we  do  not  produce 
as  much  cotton  as  we  consume,  but  because  it  is  possible  to  get 
a  very  special  variety  of  cotton  from  Egypt.  Tobacco  is  another 
example.  We  ex-port  much  tobacco,  but,  in  order  to  meet  the 
demand  for  certain  qualities,  tobacco  is  imported  from  Cuba  and 
Sumatra. 

When  all  these  conditions  which  give  rise  to  commerce  are 
considered,  it  becomes  obvious  that  with  a  given  outlay  of 


WHAT  SHOULD  THE  NATION  PRODUCE?  75 

labor  and  capital  the  wants  of  the  people  can  be  more  com- 
pletely satisfied  by  producing  the  things  which  pay  best  and 
buying  from  abroad  the  articles  which  cannot  be  produced  or 
which  it  is  less  profitable  to  produce  in  this  country. 

The  economic  policy  which  should  be  followed  by  a  nation 
will  depend  largely  upon  the  prospects  for  world  peace  and  the 
safety  of  international  trade.  Were  world  peace  assured,  a 
world  economy  would  be  desirable,  but  at  the  present  time  the 
student  is  constrained  to  give  due  attention  to  the  importance 
of  the  all-round  development  of  agriculture  with  a  view  to  being 
able  to  feed  and  clothe  the  people  with  a  minimum  of  com- 
merce in  times  when  all  international  law  is  swept  aside. 

The  opinion  one  will  hold  regarding  free  trade  and  protection 
depends  in  part  upon  one's  judgment  with  regard  to  future 
peace.  If  we  must  become  self-sufiicing  as  a  nation,  protection 
is  one  means  of  inducing  farmers  and  manufacturers  to  produce 
commodities  which  they  would  otherwise  find  unprofitable. 
The  national  policy  should  be  the  one  which  will  yield  the  maximum 
well-being  for  the  people  of  the  nation  through  a  long  series  of 
generations.  In  view  of  the  long  periods  of  peace  which  the 
world  has  enjoyed,  particularly  since  the  days  of  Napoleon, 
and  in  view  of  the  present  hope  for  the  beginning  of  a  new  era 
of  peaceful  international  relations,  it  would  not  seem  wise  to 
look  to  a  continuous  self-sufl&cing  policy  in  order  to  be  ready 
for  war  emergencies,  but  to  be  prepared  for  rapid  readjustment 
in  agriculture  if  a  period  of  unsettled  international  relations 
should  again  overtake  us.  Sir  James  Caird  advocated  the  free 
importation  of  wheat  into  England  on  the  theory  that  since  at 
that  time  wheat  growing  was  less  profitable  to  the  nation  than 
grazing,  it  would  be  better  to  produce  cattle  during  times  of 
peace  and  buy  wheat  with  the  expectation  that  if  war  condi- 
tions should  cut  off  the  foreign  supply  the  pastures  could  be 
plowed  up,  put  into  wheat,  and  made  to  produce  more  for  the 
emergency  than  if  wheat  had  been  grown  continuously.  This 
is  exactly  what  England  did,  and  during  the  World  War  the 
wisdom  of  Caird's  advice  was  demonstrated. 

Grain  and  cotton  stand  out  as  our  great  agricultural  exports. 


76  AGRICULTURAL  ECONOMICS 

Sugar,  molasses,  and  sirup  together  take  the  lead  in  value  of 
agricultural  imports.  Coffee  is  next  in  importance.  Fruits 
are  both  exported  and  imported  in  large  quantities.  This  is 
due  to  the  fact  that  the  United  States  produces  a  surplus  of 
certain  kinds  of  fruits,  namely,  dried  apples,  prunes,  raisins, 
apricots,  and  peaches,  which  are  exported,  whereas  we  produce, 
for  example,  less  than  we  consume  of  bananas,  lemons,  and 
pineapples. 

To  become  a  self-sufficing  nation  we  would  have  to  reduce 
our  grain  crops  and  our  cotton  crops  and  produce  more  cane 
and  beets  for  sugar  and  molasses,  and  either  reduce  our  coffee 
consumption  or  learn  to  grow  great  quantities  in  the  potential 
coffee  regions  of  the  United  States.  Our  area  is  broad  and  in- 
cludes a  very  great  variety  of  soils  and  climate,  and  yet  there 
would  be  undoubtedly  a  much  smaller  amount  of  agricultural 
products  available  for  consumption  in  this  country  under  a 
self-sufficing  economy  than  under  a  world-wide  commercial 
economy. 

The  experimental  and  educational  method  of  stimulating  the 
introduction  of  new  crops  has  proved  important  in  this  country. 
For  many  years  the  Secretary  of  Agriculture  made  large  ex- 
penditures to  stimulate  the  beet  sugar  industry  in  the  United 
States.  There  were  those  who  pointed  out  that  the  high  cost 
of  labor  put  this  country  at  a  distinct  disadvantage  over  the 
beet  sugar  producers  of  northwestern  Europe.  Others  pointed 
out  that  in  the  corn  belt,  in  particular,  the  beet  would  be  unable 
to  compete  with  corn  for  the  reason  that  the  area  on  the  surface 
of  the  earth  capable  of  corn  production  is  very  small  compared 
with  the  area  capable  of  beet  production,  and  for  this  reason 
the  relative  prices  of  corn  and  sugar  on  the  world  market  will 
tend  to  be  such  as  will  enable  corn  to  drive  sugar  out  under 
conditions  of  open  competition,  and  that  there  are  other  crops 
which  we  can  grow  which  will  add  more  to  the  well-being  of 
the  people.  These  views  seemed  justified  and  were  true  under 
the  assumption  of  world  peace.  But,  as  a  matter  of  fact,  the 
stimulus  resulting  from  government  activity  established  a  beet 
sugar  industry  which  was  tottering  to  a  fall  under  free  trade, 


WHAT  SHOULD  THE  NATION  PRODUCE?  77 

but  which  has  come  forward  with  great  energy  to  meet  the 
emergencies  incident  to  war.  In  the  Hght  of  recent  events  and 
taking  into  account  the  entire  cost  of  stimulating  this  industry 
in  time  of  peace,  has  the  fostering  of  the  beet  sugar  industry 
been  justified  ?  The  same  question  arises  with  respect  to  wool 
and  other  farm  products.  The  experimental  method  may  be 
better  than  the  bounty  or  tariff  for  stimulating  industries  which 
will  succeed  on  a  small  scale.  This  is  true  of  most  farm  crops, 
but  it  is  perhaps  not  true  of  most  manufactures. 

There  are  many  conditions  under  which  it  is  desirable  to 
stimulate  the  production  of  articles  which  the  farmers  have 
not  on  their  own  account  found  occasion  to  produce.  The 
absence  of  production  may  be  due  to  lack  of  knowledge  of  the 
profits,  lack  of  skill  in  the  new  line  of  production,  or  it  may  be 
due  to  the  fact  that  the  crop  is  temporarily  less  profitable  than 
some  competing  crop,  but  in  the  long  run  would  be  more  profit- 
able. Where  a  crop  is  less  profitable  than  another,  and  this 
is  due  to  permanent  physical  conditions,  only  the  necessity  for 
a  self-sufficing  national  poHcy  will  justify  stimulating  the  farmer 
to  produce  the  crop.  But  where  the  conditions  which  make  the 
crop  unprofitable  are  temporary,  social  conditions  which  may 
be  changed,  such  as  sparse  population,  lack  of  knowledge  or 
skill,  the  case  is  a  very  different  one.  It  may  pay  to  stimulate 
immigration  and  education,  and  give  bounties  or  tariff  protec- 
tion which  will  make  it  profitable  for  farmers  to  take  up  the  new 
lines  of  production. 

In  general,  any  industry  which  can  be  established  in  a  few 
years,  and  which  when  once  established  will  be  able  to  stand 
on  its  own  merits  without  government  stimulus,  should  be 
stimulated  during  the  period  of  its  introduction.  During  the 
infancy  of  the  new  crop  or  agricultural  industry,  the  labor  and 
capital  expended  may  add  less  to  the  national  dividend  than 
some  old  crop  or  industry,  but  this  loss  is  only  apparent,  and 
is  really  chargeable  to  the  capital  account  of  the  country  if  when 
established  the  new  crop  pays  better  than  the  one  it  displaces. 

To  summarize,  each  nation  should  produce  those  agricultural 
products  which  in  the  long  run  will  add  most  to  the  well-being 


78  AGRICULTURAL  ECONOMICS 

of  the  people.  So  far  as  feasible,  the  products  should  be  those 
which  will  make  the  agricultural  productions  reach  the  maximum 
long-time  average  value  tinder  conditions  of  free  competition  among 
producers  and  among  consumers  throughout  the  civilized  world. 
In  estimating  the  long-time  average  values  of  products,  weight 
should  be  given,  however,  to  the  chance  of  war,  if  they  must 
be  secured  from  abroad.  Furthermore,  in  figuring  the  maximum 
average  value,  where  there  are  temporary  conditions  which  re- 
tard the  development  of  an  industry,  the  principal  weight  should 
be  given  to  the  future. 

In  addition  to  the  economic  and  poHtical  conditions  which 
have  been  considered  above,  there  are  ethical  questions  which 
should  not  be  lost  sight  of  by  the  statesman  in  settling  the 
question  of  what  the  farmers  of  a  nation  should  produce.  Many 
statesmen  will  feel  that  the  desires  of  men  should  be  curbed  in 
the  interest  of  human  welfare.  This  may  lead  them  to  study 
physiological  and  ethical  principles  with  a  view  to  eliminating 
certain  crops  or  products  made  from  farm  crops  which  are 
injurious  to  mankind. 


CHAPTER  IX 
LAND   AS  A  BASIS    OF  AGRICULTURAL    PRODUCTION 

Land,  labor,  and  equipment  are  the  agencies  of  production. 
Without  land  there  is  no  production  of  economic  goods  by  the 
farmer,  the  manufacturer,  or  the  merchant.  The  term  "  land  " 
is  here  used  in  the  broad  sense  to  include  all  natural  agents. 
When  a  man  buys  land  he  acquires  the  use  of  the  air,  the  sun- 
shine, the  rainfall,  the  wind  blow,  and  in  the  United  States, 
unless  especially  specified  to  the  contrary,  he  acquires  all 
minerals  lying  beneath  the  surface. 

While  all  elates  of  economic  activity  require  land,  agri- 
culture makes  the  greatest  demands  for  this  agent  of  produc- 
tion. The  census  of  manufacturer  >  fails  to  record  the  area  used 
by  the  manufacturers,  but  gives  especial  attention  to  the  statis- 
tics of  labor,  material,  and  machinery  used  in  the  manufactur- 
ing enterprises.  In  the  agricultural  census  the  subject  of  the 
land  area  used  is  given  a  prominent  position,  and  it  is  shown 
that  in  1910  there  were  878,798,325  acres  of  land  in  farms  in 
the  United  States. 

The  economic  uses  of  land  have  been  classified  as  (i)  affording 
standing  room,  (2)  supplying  mineral  products,  and  (3)  provid- 
ing the  conditions  and  materials  of  plant  growth.  Manufac- 
turers use  land  for  standing  room  and  make  heavy  demands  for 
the  products  of  the  mines.  Commerce  makes  hea\y  demands 
for  land  to  be  used  for  transportation  purposes  and  the  loca- 
tion of  warehouses,  but  agriculture  makes  use  of  the  soil  in 
the  growing  of  plants  which  are  the  means  of  satisfying  human 
wants. 

Farm  land  varies  greatly  in  its  economic  capacity.  The 
capacity  of  a  given  area  of  land  is  measured  in  terms  of  the  number 
of  units  of  labor  and  capital  which  can  be  associated  with  it  with 
optimum  results  at  a  given  stage  of  industrial  progress.    The 

79 


8o  AGRICULTUR.\L   ECONOMICS 

capacit}^  of  land  is  influenced  by  its  topography,  temperature, 
rainfall,  texture,  and  the  kind  of  crops  grown.  Clay  loam 
usually  has  greater  capacity  than  sandy  loam.,  that  is,  a  greater 
amount  of  labor  and  capital  must  be  put  upon  a  given  area  in 
order  to  secure  optimum  results  in  a  given  line  of  production. 
In  other  words,  land  with  high  capacity  permits  of  a  higher 
degree  of  intensity  of  culture  in  a  given  year  in  the  production 
of  a  given  crop  than  land  with  a  low  capacity.  This  will  be 
further  explained  in  a  later  chapter. 

Land  varies  not  only  in  its  economic  capacity  but  also  in  its 
economic  efficiency.  The  economic  efficiency  of  land  is  measured 
in  terms  of  the  value  of  the  product  per  unit  of  labor  and  capital 
expended  upon  it.  The  term  "  efficiency  "  is  here  used  in  the 
same  sense  as  it  is  used  by  the  engineer  who  calculates  the  effi- 
ciency of  his  locomotive  in  terms  of  the  power  developed  per 
unit  of  coal  shoveled  into  the  lire-box,  the  only  difference  being 
that  here  we  are  calculating  the  number  of  dollars'  worth  of 
product  per  dollar's  worth  of  labor  and  capital  put  into  the 
land.  More  briefly  stated,  efficiency  is  measured  in  terms  of 
output  per  unit  of  "  input"  whereas  capacity  is  7neasured  in 
terms  of  input  per  acre  of  land. 

Capacity  and  efficiency  are  the  two  dimensions  of  productivity. 
If  one  would  compare  the  productivity  of  two  pieces  of  land 
it  is  not  enough  to  know  how  much  corn  or  other  crop  it  will 
yield  per  acre ;  it  is  necessary  to  know  the  expense  of  the  pro- 
duction (the  input)  and  the  product  per  unit  of  expense.  A 
piece  of  land  might  yield  a  large  product  per  acre  and  yet  class 
as  relatively  poor  land  because  of  the  great  expense  of  produc- 
tion. 

The  product  is  always  equal  to  capacity  multiplied  by  efficiency, 
and  in  order  to  compare  the  worth  of  two  grades  of  land  one 
should  ascertain  the  number  of  capacity  units  per  acre  and  the 
efficiency  per  unit  of  capacity.  For  example,  in  comparing 
land  "  A  "  and  land  "  B  "  let  us  assume  that  land  "  A  "  has 
ID  units  of  capacity  and  "  B  "  8  units  of  capacity.  If  their 
efficiency  were  the  same  the  ratio  of  usefulness  would  be  as 
lo  is  to  8.     But  each  capacity  unit,  that  is  each  dollar  ex-pended 


LAND   AS  A   BASIS   OF  AGRICULTURAL  PRODUCTION      8l 

on  "  A  "  land  yields  $i.6o,  whereas  each  dollar  expended  upon 
"  B  "  yields  only  $1.50.  The  productivity  of  "  A  "  is,  there- 
fore, $1.60  X 10,  or  16,  while  the  productivity  of  "  B  "  is  $1.50  X8, 
or  12.  Thus  while  the  capacity  ratio  of  "  A  "  and  "  B  "  is 
5  to  4,  the  efficiency  ratio  is  16  to  15  and  the  productivity  ratio 
is  4  to  3.  How  much  more  can  a  given  farmer  afford  to  pay 
per  acre  for  "  A  "  land  than  for  "  B  "  land? 

Productivity  of  land  may  be  thought  of  in  terms  of  pounds 
or  bushels  of  product  per  acre,  physical  productivity;  or  pro- 
ductivity may  be  thought  of  in  terms  of  the  value  of  the  prod- 
uct per  acre,  economic  productivity.  Land  varies  greatly  in 
physical  productivity  due  to  differences  in  its  physical  and 
chemical  properties,  and  it  varies  greatly  in  its  economic  pro- 
ductivity because  of  differences  in  the  value  of  the  product  per 
unit  in  different  localities  as  well  as  in  the  kinds  and  quantities 
of  products  on  different  pieces  of  land. 

Under  the  physical  conditions  which  are  conducive  to  plant 
growth  are  included :  (i)  the  moisture  and  (2)  the  tempera- 
ture of  the  soil  and  the  air,  (3)  topography,  and  (4)  the  mechan- 
ical structure  of  the  soil.  The  amount  of  rainfall  and  simshine 
remaining  the  same,  the  moisture  and  the  temperature  of  the 
soil,  and  its  capacity  for  retaining  the  chemical  elements  of 
fertility  vary  greatly  from  place  to  place  because  of  differences 
in  the  size  of  the  particles  of  the  soil.  By  cultivation  the  soil 
may  be  improved  to  some  extent,  in  this  respect.  By  drainage 
and  by  irrigation  the  moisture  of  the  soil  can  be  modified,  and 
by  the  use  of  glass  and  artificial  heat  the  temperature  of  both 
the  soil  and  the  atmosphere  can  be  regulated.  But  in  most 
places  and  for  most  purposes  Nature  has  done  infinitely  more 
for  man  than  he  can  do  for  himself  in  providing  the  land  with 
these  desirable  physical  quahties. 

From  the  standpoint  of  the  economist  the  most  important 
chemical  conditions  of  plant  growth  are  :  (i)  nitrogen,  (2)  phos- 
phoric acid,  (3)  potash,  and  (4)  water.  Other  chemical  com- 
pounds contribute  to  plant  growth,  but  these  four  are  the 
ones  which  require  special  attention  because  they  are  present 
in  the  soil  in  limited  and  varying  quantities,  and  because  they 


Figure  2  shows,  by  counties,  the  approximate  percentage  of  the  total 
land  area  which  was  improved  farm  land  April  15,  19 10.  The  statistics, 
taken  from  the  reports  of  the  Thirteenth  Census,  afford  the  latest  informa- 
tion available  on  the  subject. 


LAND   AS   A   BASIS   OF  AGRICULTURAL   PRODUCTION      83 

are  more  or  less  readily  exhausted  and  require  considerable 
effort  to  increase  or  replenish  their  supply.  In  the  humid 
regions  where  the  water  needed  by  plants  is  abundantly  sup- 
plied by  nature  this  element  of  fertility  requires  little  or  no 
attention,  but  in  the  arid  regions  water  ranks  first  in  economic 
importance.  The  carbon  dioxide  gas  of  the  air  is  as  important 
to  plant  growth  as  is  water,  but  it  is  present  in  such  great 
abundance  that  it  has  no  value  placed  upon  it  and  hence  does 
not  enter  into  the  list  of  economic  conditions  which  require 
our  attention. 

In  comparing  the  value  of  two  pieces  of  land  physical  pro- 
ductivity is  not  a  safe  basis  for  the  reason  that  the  physical 
product  of  two  pieces  of  land  may  be  the  same  but  the  values 
of  the  products  may  be  very  different,  due  to  differences  in  the 
cost  of  marketing  the  products. 

When  a  man  contemplates  the  purchase  of  a  farm,  he  wants 
extent  of  land  with  even  topography  and  he  wants  this  land 
to  be  fertile,  but  what  is  sometimes  even  more  significant  than 
these  qualities  is  the  location  of  the  farm  which  he  is  to  cultivate. 
In  fact  the  physical  and  chemical  characteristics  of  the  land  are 
greatly  influenced  by  its  location.  Heat  and  moisture,  and  the 
character  of  the  rocks  from  which  the  soil  is  formed  vary  greatly 
from  place  to  place.  But  besides  these  variations  in  the  natural 
conditions,  there  are  variations  in  the  social  conditions  which 
influence  the  production  and  sale  of  products.  Large  popula- 
tions are  in  some  places  concentrated  on  small  areas,  leaving 
vast  territories  sparsely  settled.  This  variation  in  the  density 
of  population  may  be  explained,  in  part  at  least,  in  terms  of 
variation  in  the  physical  environment,  but  our  especial  interest 
is  in  the  effect  and  not  the  cause  of  this  variation  in  the  density 
of  population.  The  farmer  who  is  near  a  great  center  of 
population,  such  as  London  or  New  York,  can  sell  his  products 
for  the  same  price  which  is  paid  for  like  products  which  have 
been  shipped  great  distances.  Thus  it  is  that  of  two  pieces 
of  land  possessing  the  same  physical  productivity,  or  fertility, 
the  farmer  prefers  the  one  located  nearer  a  great  center  of  popu- 
lation, because  of  the  greater  "  farm  value  "  of  the  products. 


§4  AGRICULTURAL  ECONOMICS 

Because  of  these  variations  with  respect  to  fertility  and 
location,  land  is  said  to  vary  in  economic  productivity,  or,  in  its 
value-producing  power.  Variation  in  physical  productivity  of 
land  is  due  to  variation  in  soil,  variation  in  rainfall,  and  varia- 
tion in  temperature.  The  soil  in  the  United  States  varies  from 
the  sterile,  arid  sands  of  the  great  American  desert  to  the  well- 
watered  fertile  loams  of  central  Illinois,  from  land  that  will 
yield  nothing  to  land  which  will  yield  enormous  crops  of  corn 
year  after  year. 

The  improved  land  of  the  United  States  is  shown  in  the 
accompanying  map  which  is  based  upon  the  "  improved  land 
in  farms."  In  1910  there  were  478,451,750  acres  of  improved 
land  in  the  United  States.  The  enumerators  were  instructed 
to  include  under  improved  land,  "  all  land  regularly  tilled  or 
mowed,  land  pastured  and  cropped  in  rotation,  land  lying 
fallow,  land  in  gardens,  orchards,  vineyards,  nurseries,  and  land 
occupied  by  buildings."  The  improved  land  is  not  evenly 
distributed  over  the  United  States.  For  example  82.9  per 
cent  of  the  total  area  of  Iowa,  78.2  per  cent  of  Illinois,  33.7 
per  cent  of  Wisconsin,  and  1.8  per  cent  of  New  Mexico  is  im- 
proved farm  land.  Only  25.1  per  cent  of  the  total  area  of  the 
United  States  is  given  as  improved  farm  land,  whereas  73.2 
per  cent  of  England  is  improved  farm  land.  The  relatively 
low  percentage  of  improved  land  in  the  United  States  and  the 
uneven  distribution  of  this  land  can  be  explained  largely  in 
terms  of  topography,  soil,  and  climate.  A  map  showing  the 
topography  of  the  United  States  helps  one  to  understand  the 
low  percentage  of  improved  farm  land  in  the  large  are  as  occupied 
by  mountains.  (See  Fig.  3.)  A  map  showing  the  rainfall  helps 
one  to  understand  why  vast  areas  are  eliminated  from  this  class 
of  plowed  or  mowed  land,  there  not  being  enough  rainfall  to 
support  tilled  crops.  (See  Fig.  4.)  The  soil  map  shows  the 
great  irregularity  of  the  soils  of  the  United  States  with  regard 
to  their  usefulness.  A  map  showing  the  mean  temperature 
during  the  growing  season  also  throws  light  on  the  distribution 
of  improved  land.  The  resultant  of  all  these  forces  is  given  in 
a  map  showing  the  value  of  all  farm  crops  by  counties  in  the 


Figure  3  shows  the  topography  of  the  United  States  in  a  generalized 
way.  It  is  a  photograph  of  a  reUef  model  of  the  United  States,  and  was 
courteously  supplied  by  the  U.  S.  Geological  Survey. 


Figure  4  shows  the  average  annual  precipitation  (rain,  melted  snow, 
sleet,  and  hail).  It  is  much  reduced  and  generalized  from  a  map  pre- 
pared by  the  U.  S.  Weather  Bureau  for  publication  in  the  Precipita- 
tion and  Humidity  section  of  the  Atlas  of  American  Agriculture. 


LAND   AS  A   BASIS  OF  AGRICULTURAL  PRODUCTION     87 

United  States  in  1909.  (See  Fig.  5.)  The  variation  in  value  of 
crops  is  due,  of  course,  not  only  to  differences  in  topography,  soil, 
and  climate,  but  to  differences  in  the  character  of  the  people  cultivat- 
ing the  land  and  to  differences  in  the  distances  from  the  market. 

While  only  25.1  per  cent  of  the  total  land  area  of  the  United 
States  is  improved  farm  land,  46.2  per  cent  of  the  total  area  is 
in  farms.  Thus  21.1  per  cent  represents  unimproved  land  in 
farms.  This  is  not  to  be  ignored  when  considering  the  land 
basis  of  agriculture.  Much  of  this  unimproved  land  provides 
valuable  pasture.  It  is  never  plowed  or  mowed,  because  it  is 
too  wet,  too  hilly,  or  contains  too  many  obstructions  such  as 
stones  and  stumps.  In  five  counties  in  southern  Wisconsin 
for  which  pasture  statistics  are  available,  78.5  per  cent  of  the 
unimproved  land  in  farms  is  reported  as  used  for  pasture,  about 
f  of  which  was  designated  woodland  pasture.  A  large  share  of 
the  woodland  on  farms  yields  considerable  pasture.  This  same 
area  3delds  wood  for  fuel,  fencing  and  buildings,  also  wood  prod- 
ucts for  the  market,  such  as  posts,  lumber,  and  cord  wood, 
which  supplement  the  farmer's  income.  On  one  farm  in 
central  Wisconsin,  which  is  more  than  half  woodland  and  on 
which  the  tillage  area  is  gradually  encroaching  on  the  timbered 
area,  about  one-fifth  of  the  total  farm  receipts  comes  from  the 
sale  of  wood  in  various  forms. 

The  vast  areas  of  land  not  in  farms  in  the  United  States  is 
mainly  occupied  by  mountains,  deserts,  forests,  cities,  railways, 
etc.  A  part  of  it  is  used  as  range  pasture,  but  much  of  it  serves 
no  agricultural  purpose.  Some  of  it  can  be  converted  into  farms, 
but  the  greater  part  of  it  is  at  present  far  below  the  margin  of 
profitable  utilization. 

Irrigation  is  proving  an  important  means  of  extending  agri- 
culture in  the  arid  regions.  To  quote  Professor  Elwood  Mead : 
"  The  uninhabited  and  mismanaged  areas  of  the  arid  region  are 
full  of  opportunities.  A  reaUzation  of  the  possibiHties  of  this 
region  and  of  what  man  can  accompHsh  by  a  right  use  of  its 
resources  has  been  of  slow  growth.  To  the  early  fur  traders 
and  explorers  the  arid  region  was  a  dreary,  worthless  waste. 
To  neither  Bonneville,  Fremont,  nor  any  of  the  multitude  who 


FlGUEB  S 


LAND  AS  A  BASIS  OF  AGRICULTURAL  PRODUCTION     89 

crossed  its  vast  expanse  to  reach  the  golden  rivers  of  California 
was  there  given  any  prophetic  vision  of  the  magic  to  be  wrought 
by  irrigation.  Nor  is  this  surprising.  It  is  difficult  to  imagine 
anything  less  attractive  than  the  stretches  of  barren  sand  broken 
only  by  the  isolated  yuccas  of  the  Mojave  Desert,  or  anything 
more  dreary  than  the  crucifixion  thorn  of  Arizona.  Only  in 
locahties  where  the  work  of  the  reclamation  has  been  in  prog- 
ress long  enough  to  permit  the  growth  of  trees,  flowers,  and 
shrubs,  can  the  possibilities  of  the  soil  and  climate  be  appre- 
ciated. No  greater  contrast  can  be  found  anywhere  than  is 
afforded  by  a  comparison  of  the  desert  above  the  ditches  and 
the  cultivated  fields  below  them.  .  .  .  The  arid  West  is  the 
nation's  farm.  It  contains  all  that  is  left  of  the  pubhc  domain, 
and  is  the  chief  hope  of  those  who  dream  of  enjoying  landed 
independence,  but  who  have  Uttle  beside  industry  and  self- 
denial  with  which  to  secure  it.  As  it  is  now,  this  land  has  Httle 
value.  This  is  not  because  the  land  lacks  fertility,  but  because 
it  lacks  moisture.  Where  rivers  have  been  turned  from  their 
courses,  the  products  which  have  resulted  equal  in  excellence 
and  amount  those  of  the  most  favored  district  of  ample  rain- 
fall." And  yet,  with  respect  to  the  proportion  of  these  arid 
regions  which  may  be  made  productive,  the  same  authority 
gives  the  following  rather  discouraging  estimate :  "  if  every 
drop  of  water  which  falls  on  the  mountain  summits  could  be 
utiHzed,  it  is  not  likely  that  more  than  ten  per  cent  of  the  total 
area  of  the  arid  West  could  be  irrigated,  and  it  is  certain  that, 
because  of  physical  obstacles,  it  will  never  be  possible  to  get 
water  to  even  this  small  percentage."  ^ 

The  clearing  of  cut-over  land.  There  are  vast  areas  of  land 
in  the  United  States  formerly  in  forest  from  which  the  saw 
timber  has  been  cut,  much  of  which  may  be  converted  into  farm 
land.  This  land  usually  requires  a  very  considerable  amount  of 
labor  supphes  and  equipment  to  clear  it  of  stumps  and  brush. 
This  accounts  for  the  fact  that  it  has  been  passed  by  so  long 
as  rich  prairie  lands  were  available.  Unfortunately,  however, 
much  of  this  cut-over  land  both  in  the  North  and  in  the  South 
*  Irrigation  Institutions,  pp.  2,  3,  and  5. 


90  AGRICULTURAL  ECONOMICS 

is  of  poor  quality  for  farming  purposes  because  of  the  excess 
of  sand  in  the  soil.  By  careful  selection  very  important  quanti- 
ties of  good  land  can  be  added  to  our  farm  area  at  an  expense 
which  will  prove  a  profitable  investment. 

Drainage  is  another  important  means  of  expanding  the  area 
of  improved  farm  land.  Along  the  rivers  and  coasts  and  in 
much  of  the  glaciated  area  of  the  United  States  marshes  and 
swamps  are  found  which  when  drained  will  add  greatly  to  the 
supply  of  farm  land.  It  has  been  estimated  that  70,000,000 
acres  of  land  await  improvement  by  drainage. 

The  introduction  of  new  varieties  of  grains  and  forage  crops 
which  are  suited  to  semiarid  regions  makes  possible  the  exten- 
sion of  agriculture  where  the  rainfall  is  too  light  for  the  crops 
which  are  commonly  grown  in  the  humid  regions.  For  example, 
the  drought-resisting  macaroni  wheats  have  recently  been  in- 
troduced with  great  profit.  "  In  many  places  west  of  the  looth 
meridian,  where  wheat  growing  with  other  varieties  is  prac- 
tically impossible  on  account  of  drought,  the  eastern  Russian 
varieties  by  virtue  of  their  extreme  drought-resisting  qualities 
will  produce,  ordinarily,  a  crop  of  from  twelve  to  twenty  bushels 
per  acre.  By  the  use  of  these  wheats,  therefore,  these  locali- 
ties may  become  important  additions  to  the  wheat  area."  ^ 

The  introduction  of  several  varieties  of  sorghum  as  forage 
crops  in  the  southwest  is  resulting  in  the  expansion  of  farm  land 
in  western  Kansas  and  parts  of  Texas  and  New  Mexico. 

Along  with  the  introduction  of  new  crops  which  can  be  grown 
on  semiarid  lands,  much  is  being  done  to  expand  the  area  of 
plow  land  by  new  methods  of  culture  commonly  known  as 
"  dry-farming,"  which  consists  in  cultivating  the  land  to  con- 
serve the  moisture.  It  is  common  to  cultivate  the  land  for  one 
season  with  nothing  growing  on  it  in  order  to  conserve  the 
moisture  and  then  seed  to  wheat.  By  this  means  the  wheat 
crop  may  have  the  benefit  of  more  moisture  than  would 
be  available  if  attempts  were  made  to  secure  a  crop  each 
year. 

'  United  States  Department  of  Agriculture,  Bureau  of  Plant  Industry,  Bulletin 
No.  3,  p.  28. 


LAND   AS  A  BASIS  OF  AGRICULTURAL   PRODUCTION     91 

The  future  will  be  very  different  from  the  past  with  regard 
to  the  expansion  of  the  area  of  farm  land.  In  1850  the  land  area 
of  the  country  was  1,884,375,680  acres,  but  only  15.6  per  cent 
of  it  was  in  farms,  only  6  per  cent  was  improved  farm  land,  and 
there  were  only  1,449,073  farms.  In  1910  the  total  land  area 
of  the  country  was  1,903,289,600  acres,  42.6  per  cent  of  which 
was  in  farms,  25.1  per  cent  of  which  was  improved  land,  and 
there  were  6,361,502  farms.  The  best  farm  land  of  the  United 
States  was  brought  into  cultivation  during  the  sixty  years 
from  1850  to  1910.  Prairie  land  and  the  development  of  the 
railway  system  made  this  the  period  of  the  most  rapid  develop- 
ment of  farms  in  the  history  of  this  country.  A  study  of  the 
soil,  climate,  and  topography  convinces  one  that  the  expansion 
of  the  agricultural  area  will  proceed  much  slower  in  the  future 
than  it  has  in  the  past.  In  fact  the  decade  from  1900  to  1910 
showed  a  great  decline  in  the  rate  of  expansion.  Between 
1890  and  1900  the  farm  area  expanded  more  than  215,000,000 
acres,  while  between  1900  and  1910  the  farm  area  expanded  only 
about  40,000,000  acres,  though  the  increase  in  population  was 
greater  in  the  latter  decade  than  in  the  former. 

Quality  of  the  new  land.  During  the  past  sixty  years,  when 
the  area  of  farm  land  was  increased,  it  was  not  unusual  for  the 
new  land  to  be  more  easily  brought  under  cultivation  and  more 
fertile  than  the  land  already  under  cultivation. 

This  was  true  during  the  period  of  the  development  of  the 
prairies  of  the  north  central  states  and  the  black  prairie  of 
Texas.  In  the  future,  however,  when  the  demands  for  agricul- 
tural products  make  it  desirable  to  resort  to  lands  not  now  used 
for  agricultural  purposes,  the  new  additions  to  the  supply  will 
either  be  expensive  to  bring  under  cultivation  or  infertile  when 
brought  into  use.  This  means  that  the  new  increments  of  supply 
will  yield  less  per  dollar  of  expenditure  upon  them  and  can  for 
this  reason  be  resorted  to  with  profit  only  under  condition  of  rising 
prices  for  farm  products  or  falling  costs  for  labor  and  equipment. 

The  growth  of  our  population  is  sure  to  make  increasing 
demands  upon  the  agricultural  resources  of  the  country,  a  part 
of  which  may  be  met  by  extending  the  industry  into  regions 


92  AGRICULTURAL   ECONOMICS 

which  are  not  being  used;  but  the  most  important  means  of 
increasing  the  supply  of  agricultural  products  in  the  future 
will  be  doubtless  by  farming  more  intensively  the  land  which  is 
already  in  use.  This  means  that  the  part  which  labor,  equip- 
ment, and  skill  in  management  will  play  in  agricultural  produc- 
tion will  be  more  important,  relatively,  in  the  future  than  in 
the  past.  In  other  words,  there  will  probably  be  a  continual 
increase  in  the  amount  of  labor  and  capital  it  will  pay  to  expend 
on  a  given  area  of  land  with  a  view  to  increasing  the  product. 
This  will  make  the  problem  of  the  proper  degree  of  intensity  of 
culture  a  central  one  in  the  minds  of  the  thinking  farmers. 

While  the  product  can  be  greatly  increased  by  means  of 
increased  intensity  of  culture,  it  is  true  that  after  a  certain 
point  has  been  reached  the  return  per  unit  of  expense  decHnes 
with  every  increase  in  intensity.  Thus  whether  the  new  in- 
crements of  supply  of  farm  products  are  secured  by  expanding 
the  farm  area  or  by  increasing  the  product  per  acre,  the  law  of 
increasing  costs  and  diminishing  returns  per  unit  of  social  economic 
energy  put  into  agricultural  production  is  almost  sure  to  operate. 
The  hope  for  relief  from  the  depressing  efect  of  the  law  of  diminish- 
ing returns  lies  in  the  improvements  in  men  and  equipment  which 
will  increase  their  efficiency. 


CHAPTER  X 
FARM  EQUIPMENT 

By  the  term  "  equipment  "  we  mean  all  produced  instruments 
of  production.  In  this  class  fall  all  agencies  of  production  ex- 
cepting man  and  land  or  nature.  Thus  horses,  tools,  machinery, 
buildings,  fences,  seeds,  feeds,  and  other  supplies  are  here  classed 
as  equipment.  Economists  have  used  the  term  "  capital  " 
in  the  same  sense  the  term  "  equipment  "  is  used  here.  The 
term  which  clearly  refers  to  the  concrete  goods  rather  than  to 
their  value  or  to  the  amount  of  money  invested  in  them  is 
preferred  because  a  large  share  of  the  readers  of  this  book  are 
accustomed  to  thinking  of  "  capital  "  as  the  amount  of  money 
invested  in  the  land  and  the  equipment  together. 

The  equipments  of  the  farm  may  be  classed  as  movable  and 
immovable.  In  the  first  class  fall  the  live  stock,  tools,  machin- 
ery, and  supplies,  while  buildings,  fences,  wells,  etc.  form  the 
latter  class.  A  distinction  is  sometimes  made  between  operat- 
ing capital  diTid  fixed  capital;  the  former  is  applied  to  those  items 
which  we  call  movable  equipment,  the  latter  including  land  as 
well  as  permanent  improvements.  It  is  only  fair  to  note,  how- 
ever, in  this  connection,  that  a  dairy  cow  barn  and  silos  are  just 
as  truly  operating  capital  in  the  milk  business  as  the  cows  them- 
selves, and  a  tobacco  curing  shed  is  operating  capital  to  the 
tobacco  grower  as  much  as  his  transplanter,  but  in  the  common 
usage  of  the  terms,  the  barns,  silos,  and  shed  would  be  classed 
as  fixed  capital. 

Farm  buildings  in  the  United  States  were  valued  at  $6,- 
325,451,528,  April  15,  1910,  or  about  15  per  cent  of  the  valua- 
tion of  all  farm  property.  Implements  and  machinery  were 
valued  at  $1,265,149,783,  and  live  stock  at  $4,925,173,610. 

93 


94 


AGRICULTURAL  ECONOMICS 


The  average  value  of  farm  buildings  was  $7.20  per  acre,  that  of 
implements  and  machinery  $1.44,  and  that  of  live  stock  $5.60 
per  acre,  a  total  of  $14.24  per  acre  for  these  equipments.  The 
feeds,  seeds,  and  other  supplies  on  hand  were  not  given,  but 
the  equipments  given  represent  30.5  per  cent  of  the  total  in- 
vestment shown  in  the  census,  and  it  is  believed  that  when 
supplies  are  added  for  April  15,  the  equipment  will  equal  at 
least  one-third  the  total  farm  investment  of  the  country. 

The  average  value  of  each  class  of  farm  property  per  acre 
of  land  in  farms  is  shown  in  the  following  table : 


TABLE  II 

Average  Valtje  per  Acre  of  Farm  Property 
April  15,  1910 


All  Farm 
Property 

Land 

Buildings 

Imple.  and 
Mach. 

Live  Stock 

New  England .     .     . 

S43-99 

$19-34 

$17-06 

$2.58 

$4.97 

Mid.  Atlantic . 

68.52 

33-86 

22.70 

3-88 

8.08 

E.  No.  Central 

85.81 

61.32 

13-93 

2.28 

8.28 

W.  No.  Central 

58.18 

43.21 

6.71 

1-59 

6.67 

So.  Atlantic     . 

28.44 

18.15 

5-81 

0-95 

3-53 

E.  So.  Central 

26.78 

16.28 

5-05 

0.92 

4-53 

W.  So.  Central 

22.69 

16.06 

2.44 

0.71 

3-49 

Mountain   .     . 

29.52 

^9-73 

2-44 

0.83 

6.53 

Pacific    . 

54-17 
46.64 

43-76 
32.40 

4-52 
7.20 

1.29 
1.44 

4.60 

U.  S 

5.60 

From  this  table  it  will  be  seen  that  buildings  and  machinery 
are  very  much  more  important  in  the  North  than  in  the  South, 
and  in  the  East  than  in  the  West.  These  differences  are  due 
to  differences  in  climate,  type  of  farming,  and  the  standard 
of  living  of  those  who  live  on  farms.  While  the  above  table 
is  useful  in  making  comparisons  with  respect  to  the  amount 
invested  per  acre  in  the  different  parts  of  the  United  States, 
the  following  table,  showing  the  percentage  distribution  of 
value  of  farm  property,  is  more  useful  in  comparing  the  relative 
importance  of  each  class  of  investments. 


FARM  EQUIPMENT 


95 


TABLE   III 

Percentage  Distribution  of  Value  of  Farm  Property 
April  15,  1910 


Geographic  Div. 

Land 

Buildings 

Imple.  and 
Mach. 

Live  Stock 

United  States .     .     . 

69-5 

iS-S 

3-1 

II. 9 

New  England 

44.1 

38.8 

5-8 

II-3 

Mid.  Atlantic 

49-4 

33-^ 

5-8 

11.8 

E.  No.  Cen. 

71.4 

16.2 

2.7 

9-7 

W.  No.  Cen. 

74-3 

II-5 

2.7 

ii-S 

So.  Atlantic 

63.7 

20.5 

3-3 

12.4 

E.  So.  Cen. 

60.8 

18.9 

3-4 

16.9 

W.  So.  Cen. 

70.7 

10.8 

3-r 

15-4 

Mountain 

66.8 

2.8 

2.8 

22.1 

Pacific 

80.0 

8.2 

2.4 

8.5 

During  the  second  half  of  the  19th  century,  northern  agricul- 
ture was  revolutionized  by  the  application  to  agriculture  of  a 
great  variety  of  labor-saving  machinery.  The  sickle,  the  cradle, 
and  the  scythe  were  replaced  by  the  reaping  and  mowing  ma- 
chines which  did  the  work  of  many  men.  The  reaper  first 
simply  cut  the  grain  and  left  it  to  be  bound  by  hand,  but  before 
the  end  of  the  eighties  the  self-binder  was  the  common  method 
of  harvesting  small  grain  of  all  kinds  where  grown  in  commercial 
quantities. 

The  methods  of  threshing  small  grain  made  great  progress 
during  the  past  century.  Threshing  with  the  flail,  and  tramp- 
ing out  by  means  of  horses  or  cattle,  were  being  replaced  by 
simple  forms  of  threshing  machines  in  1840.  The  early  thresh- 
ing machine  consisted  of  a  cylinder  and  a  concave  each  studded 
with  spikes.  This  machine  was  driven  by  horse  power.  This 
machine  knocked  the  grain  loose  but  did  not  separate  it  from 
the  straw  and  chaff.  The  winnowing  was  usually  done  by 
means  of  the  fanning  mill  turned  by  hand,  though  many  farms 
in  the  West  had  no  fanning  mill.  The  thresher  and  fanning  mill 
were  soon  combined  in  the  one  machine  which  threshed  and 
cleaned  the  grain. 


96  AGRICULTURAL  ECONOMICS 

Aside  from  these  inventions  which  center  about  the  small 
grain,  the  most  important  inventions  were  the  steel  plow, 
the  corn  planter,  the  corn  cultivator,  the  mower,  the  rake,  and 
the  horse  hay  fork.  These  inventions  eliminated  a  great  share 
of  the  labor  involved  in  growing  the  staple  crops  of  the 
North.  By  the  use  of  machinery  the  effectiveness  of  human 
labor  in  the  production  of  northern  field  crops  was  more  than 
doubled. 

This  development  of  machinery  seems  to  have  been  the  result 
of  a  scarcity  of  labor  at  a  time  when  railway  transportation  made 
the  fertile  prairies  of  the  north  central  states  accessible  to  the 
eastern  markets,  making  commercial  grain  growing  profitable. 
The  invention  of  machinery  has  reduced  the  part  played  by 
human  brawn  and  increased  the  part  played  by  human  brain, 
and  by  mechanical  and  animal  equipment.  The  main  tendency 
has  been  to  increase  the  amount  of  land  one  man  can  operate. 
What  the  effect  will  be  ivhen  population  increases  more  rapidly 
than  the  land,  and  the  desire  is  to  get  larger  amounts  of  product 
per  acre  instead  of  farming  more  acres,  is  a  question  worthy  of 
attention.  Every  effort  has  been  devoted  to  increasing  the 
capacity  of  machinery  with  respect  to  land  and  the  efficiency  of 
machinery  with  respect  to  man.  The  future  need  will  be  in  the 
direction  of  greater  efficiency  of  machinery,  when  measured  in 
terms  of  product  per  unit  of  land. 

The  invention  of  the  cotton  gin  in  the  previous  century 
stamped  upon  the  South  a  type  of  farming  making  large  demands 
for  hand  labor  in  the  field  in  hoeing  and  picking  cotton.  Little 
progress  has  been  made  in  the  use  of  labor-saving  devices  for 
the  picking  of  cotton  and  the  husking  of  corn. 

The  improvements  in  the  live  stock  have  been  in  the  direc- 
tion of  greater  productivity.  The  tendency  has  been  to  secure 
a  hog  which  can  be  prepared  for  the  market  in  from  6  to  9 
months  instead  of  from  12  to  15  months.  The  tendency  has 
been  to  develop  a  cow  which  will  yield  a  large  amount  of  butter 
fat  without  careful  records  to  show  whether  this  is  the  result 
of  large  product  per  unit  of  feed  or  simply  large  product  without 
regard  to  feed  consumed.     With  high  feed  costs  more  atten- 


FARM  EQUIPMENT  97 

tion  must  be  given  to  the  efficiency  of  cows  if  the  farmer  would 
secure  high  profits. 

Throughout  the  past  century  the  presence  of  cheap  grazing 
lands  resulted  in  the  most  careless  use  of  land  and  feed  in  the 
beef  cattle  industry,  but  the  recent  movement  has  been  the 
same  as  that  in  hog  production.  The  beef  animals  are  being  pro- 
duced in  a  shorter  period  which  usually  means  greater  efl&- 
ciency  in  terms  of  land  and  feed.  The  baby-beef  industry  is 
the  result  of  this  movement  for  reducing  the  length  of  time  re- 
quired to  produce  a  steer.  This  usually  means  more  intensive 
culture  and  probably  small  gross  returns  per  hour  of  human 
effort  put  into  the  business,  but  it  provides  labor  for  many  more 
hours  in  the  year  and  greatly  increases  the  returns  per  unit  of 
land. 

Equipments  of  all  kinds  vary  in  capacity  and  efficiency. 
This  is  true  of  horses,  cattle,  sheep,  and  hogs.  In  each  class 
there  is  a  variation  in  the  amount  of  feed  and  labor  demanded 
by  the  different  animals,  or  their  capacity;  there  is  also  a 
wide  range  in  the  product  per  unit  of  input,  that  is  in  their 
efficiency.  There  has  been  a  tendency  for  experimental  feeders 
to  confuse  digestive  efficiency  and  economic  efficiency.  This 
has  led  some  people  to  believe  that  all  differences  in  dairy 
cows,  for  example,  are  differences  in  capacity.  The  table  on 
the  following  page  based  upon  the  results  of  the  Wisconsin  dairy 
cow  competition,  1909-igii,  throws  light  upon  the  question  of 
differences  in  the  economic  efficiency  of  dairy  cows. 

It  is  believed  that  this  table  helps  to  establish  the  idea  that 
being  a  "  good  feeder,"  however  desirable  this  quality  in  a 
cow,  is  not  the  only  qualification  of  a  dairy  cow.  In  the  above 
table  the  cow  which  ranked  second  in  the  amount  of  feed  con- 
sumed ranked  twenty-fifth  in  product  per  unit  of  feed. 

The  range  in  efficiency  of  the  26  cows  in  the  herd  from  which 
these  figures  were  taken  was  from  1.44  to  2.46.  When  all  of 
the  398  cows  in  the  competition  are  compared  the  variation  is 
much  greater,  varying  from  .92  to  2.71.  It  should  be  recognized, 
however,  that  when  cows  on  different  farms  are  compared,  the 
differences  may  be  due  in  part  to  differences  in  the  efficiency 


98 


AGRICULTURAL  ECONOMICS 


of  the  men  in  charge  of  the  cows,  and  only  partly  to  differences 
in  the  potential  eflSciency  of  the  cows  themselves. 

TABLE   IV 

Variations  in  Efficiency  and  Capacity  of  26  Registered  Holstein 
Cows  under  the  Same  Management 


Efficiency 

Capacity 

Productivity 

Product 

Value  of 

Value  of 

Value  of 

Product 

minus  Cost 

of  Feed 

Rank 

per  Unit 

Rank 

Feed 

Rank 

Product 

Rank 

of  Feed 

Consumed 

per  Cow 

I 

$2.46 

I 

$99-83 

I 

$246.10 

I 

$146.27 

2 

2.40 

16 

S6.42 

5 

207.76 

4 

121.34 

3 

2.38 

7 

91.05 

3 

216.52 

3 

125.47 

4 

2-34 

5 

94-05 

2 

220.01 

2 

125.96 

5 

2.28 

4 

94.06 

4 

214.87 

5 

120.81 

6 

2.13 

18 

86.06 

6 

183-53 

6 

97-47 

7 

2.09 

20 

84.20 

10 

176.39 

7 

92.19 

8 

2.06 

14 

86.70 

8 

178.56 

8 

91.86 

9 

2.05 

13 

86.75 

9 

178.II 

9 

91.36 

10 

1-93 

15 

86.59 

13 

166.70 

12 

80.11 

II 

1.91 

II 

88.52 

12 

169.20 

II 

80.68 

12 

1.91 

6 

94.01 

7 

179.25 

10 

85.24 

13 

1.82 

17 

86.23 

15 

157-20 

14 

70.97 

14 

1.76 

3 

98-93 

II 

174.64 

13 

75-71 

15 

1.74 

26 

82.69 

20 

143-61 

18 

60.92 

16 

1-73 

25 

82.94 

22 

143-18 

10 

60.24 

17 

1.72 

12 

87.03 

18 

150.02 

16 

62.99 

18 

1.72 

9 

89.07 

16 

153-51 

15 

64.44 

19 

1.72 

21 

83-52 

21 

143.61 

20 

60.09 

20 

1.69 

23 

83.10 

23 

140.46 

22 

57-36 

21 

1.69 

9 

89.16 

17 

150.68 

17 

61.52 

22 

1.65 

24 

83.01 

24 

136.60 

24 

53-59 

23 

1.63 

8 

89-32 

19 

145-41 

23 

56.09 

24 

1.60 

22 

82.22 

25 

131-35 

25 

49-13 

25 

1.58 

2 

99-74 

14 

157.28 

21 

57-54 

26 

1.44 

19 

84-77 

26 

122.22 

26 

37-45 

Average 

$1.91 

$88.46 

$168.72 

$80.26 

FARM  EQUIPMENT  99 

There  is  a  wide  range  in  the  efl&ciency  and  the  capacity  of 
the  different  machines  intended  for  essentially  the  same  pur- 
pose, as  for  example  plows,  harrows,  mowers,  hay  rakes,  hay 
loaders,  reapers,  threshers,  and  silage  cutters. 

These  differences  exist  at  a  given  time  because  one  kind  of 
machine  is  suited  to  one  condition  with  respect  to  climate  and 
topography  while  another  machine  suits  best  under  other  con- 
ditions. The  fact  is,  however,  that  improvements  made  by 
one  company  of  manufacture  is  soon  duplicated  by  another, 
so  that  the  machines  on  the  market,  available  for  a  given  type 
of  farming,  vary  but  little  after  the  principle  has  once  been 
thoroughly  worked  out.  Mowing  machines  and  self-binders, 
for  example,  vary  but  httle  in  construction  aside  from  speed  of 
the  sickle  and  length  of  the  cutter  bar,  which  differences  enable 
the  farmer  to  choose  to  suit  his  condition. 

The  range  in  the  efficiency  and  capacity  of  machines  is  best 
emphasized  when  the  subject  is  viewed  historically.  Studies 
made  by  the  United  States  Department  of  Labor  show  that  by 
the  methods  used  in  1 829-1 830  one  hundred  hours  of  labor 
would  produce  about  46.5  bushels  of  barley,  whereas  in  1895- 
1896  one  hundred  hours  of  man  labor  results  in  over  1 100  bushels. 
While  all  of  this  change  cannot  necessarily  be  attributed  to  the 
improvement  of  machinery  it  is  certainly  true  that  the  effi- 
ciency of  machinery  as  measured  in  terms  of  product  per  unit 
of  human  labor  was  enormously  increased  as  a  result  of  the 
new  forms  of  machinery  introduced  during  this  period. 

In  the  production  of  wheat  each  day's  labor  produced  3-^ 
bushels  in  1829-1830,  while  under  the  machine  method  of  1896 
the  product  had  expanded  to  60  bushels  per  day  of  human  labor. 
In  general  the  increase  in  product  per  unit  of  man  labor  has 
varied  from  150  per  cent  in  the  case  of  rye  to  2244  per  cent  in 
the  case  of  barley. 

Some  of  the  machines  which  have  so  greatly  increased  the 
product  per  man  in  agricultural  production  are  too  expensive 
to  be  owned  by  the  small  farmer.  The  threshing  machine,  the 
ensilage  cutter,  and  the  corn  sheller  are  typical  examples.  In- 
stead of  increasing  the  size  of  the  farm  beyond  the  point  of 


lOO  AGRICULTURAL  ECONOMICS 

economy  when  other  forms  of  equipment  are  concerned  or 
reducing  the  machine  to  an  inefficient  size  in  order  to  make  the 
machine  fit  the  farm,  the  practical  solution  has  been  to  have 
one  farmer  own  a  machine  with  which  he  does  the  work  for  a 
whole  neighborhood.  For  six  weeks  in  the  fall  the  dairy  farmer 
of  southern  Wisconsin  works  in  cooperation  with  his  neighbors 
threshing  grain  and  filling  silos. 

For  some  farms  the  self-binder  is  a  burden  because  it  is  kept 
a  year  for  two  days'  work.  Where  there  is  but  little  machine 
work  to  do  the  economy  of  making  one  binder  do  the  work  on 
several  farms  is  obvious. 

The  tractor  is  the  most  expensive  piece  of  farm  machinery 
which  the  farmer  has  contemplated  buying  for  his  own  use. 
It  would  appear  that  some  plan  whereby  the  plowing  of  a  neigh- 
borhood might  be  done  by  one  tractor  would  be  more  in  keep- 
ing with  good  farm  economy  than  to  put  a  tractor  on  each  farm 
where  it  will  stand  in  the  shed  most  of  the  time.  Furthermore, 
before  buying  an  expensive  machine,  like  a  tractor,  the  farmer 
should  consider  very  carefully  the  annual  cost  of  its  use  including 
interest,  depreciation,  repairs,  and  supplies.  This  should  be 
balanced  over  against  the  reduction  of  other  costs  and  the  in- 
creased income.  The  danger  is  that  the  farmer  will  underesti- 
mate the  cost  of  using  a  tractor  and  overestimate  the  amount  it 
will  reduce  other  costs,  such  as  horse  labor  costs  and  human 
labor  costs.  The  fact  that  machinery  has  done  so  much  for  the 
farmer  in  the  past  leaves  him  open  to  exploitation,  and  the 
danger  is  that  the  agricultural  papers  will  join  hands  with  the 
manufacturers  in  carrying  on  this  exploitation. 

Equipments  are  very  different  from  land  with  regard  to  the 
possibiHty  of  increasing  the  supply.  The  increase  in  the  supply 
of  animal  equipment  is  limited  only  by  scarcity  of  land  on  which 
to  produce  herds.  The  supply  of  tools  and  machinery  may  also 
be  increased  indefinitely,  the  limit  being  set  only  by  the  amount 
which  the  farmers  can  use  with  profit  on  the  available  land 
area.  In  general,  it  may  be  said  that  the  equipments  may  be 
expected  to  increase  more  rapidly  than  the  land  supply. 

The  contrast  between  land  and  equipments  is  greatest,  how- 


FARM  EQUIPMENT  lOl 

ever,  when  the  qualities  of  the  new  increments  of  supply  are 
considered.  Whereas  the  new  increments  of  supply  of  land  are 
expected  to  be  less  and  less  useful  as  time  passes,  not  only  are 
the  new  increments  of  supply  of  equipments  expected  to  be  more 
useful  than  the  old  supply,  but  the  old  supply  may  be  replaced 
by  improved  varieties.  This  is  especially  easy  in  the  case  of 
machinery  where  a  new  design  unrelated  to  those  formerly  in 
use  may  entirely  replace  the  old.  With  live  stock,  Umitations 
are  set  by  the  fact  that  the  new  is  the  progeny  of  the  old  and 
possesses  essentially  the  same  characteristics.  The  oppor- 
tunity for  quick  improvement  here  comes  from  the  multiply- 
ing of  the  animals  of  superior  quality  and  eliminating  those  of 
inferior  quality. 

In  general,  the  possibility  of  continuous  improvement  of  the 
usefulness  of  farm  equipments  makes  the  outlook  for  the  future 
optimistic  in  spite  of  the  fact  that  the  new  additions  to  the  farm 
land  area  may  be  less  afid  less  useful. 


BIO-AGRICULTURAL  LIBRAR 
UNIVERSITY  OF  CALIFORNIA 
RIVERSIDE.  CALIFORNIA  925 


CHAPTER  XI 
THE  HUMAN  BASIS  OF  AGRICULTURAL  PRODUCTION 

While  it  is  the  purpose  of  agricultural  production  to  satisfy 
human  wants,  and  man  is  rightly  considered  the  end  in  view 
in  the  production  of  all  economic  goods,  it  is  also  true  that 
human  brawn  and  human  brain  are  so  important  in  giving  direc- 
tion to  the  other  factors  that  man  may  easily  be  counted  the 
most  important  of  the  three  factors  of  production.  Whatever 
affects  man  as  an  agent  in  agricultural  production  seriously 
affects  the  results  of  this  basic  industry. 

There  is  essentially  but  one  class  of  people  engaged  in  agri- 
culture in  the  northern  part  of  the  United  States,  but  in  the 
South  there  are  clearly  defined  lines  of  demarcation  between 
managers  and  workmen.  In  the  North  the  same  man  is  usually 
a  manager  and  a  workman.  Those  who  are  workmen  and  not 
managers  are  usually  young  men  who  expect  to  become  farmers 
on  their  own  account  in  the  course  of  time.  The  difference 
in  the  South  is  due  to  the  presence  of  the  colored  workmen  who 
labor  under  the  direction  of  white  managers.  In  many  foreign 
countries  there  is  a  classification  of  the  agricultural  popula- 
tion into  landlords,  farmers  or  managers,  and  laborers.  This 
is  notably  true  of  England.  While  one  man  may  represent  all 
of  these  classes  in  the  United  States,  there  are  functions  corre- 
sponding to  the  three  classes.  Especial  attention  will  here  be 
given  to  labor  and  management  as  functions  of  the  human 
factor  in  agricultural  production. 

In  1910  there  were  about  twelve  and  one-half  miUion  persons 
engaged  in  agricultural  pursuits  in  the  United  States.  About 
half  of  these  were  classed  as  farmers,  and  the  other  half  were 
classed  as  laborers.  Five-sixths  of  the  total  were  male  and  one- 
sixth  female,  but  of  the  laborers,  three-fourths  were  male  and 


THE  HUMAN  BASIS  OF  AGRICULTURAL  PRODUCTION      1 03 

one-fourth  female.  Over  three-fifths  of  the  laborers  are  members 
of  the  farmers'  families,  and  less  than  two-fifths  are  "  working 
out." 

The  human  element  in  agriculture  is,  as  a  rule,  organized 
into  family  groups.  Where  the  natural  family  is  too  small  for 
the  farm,  additional  members  are  taken  into  the  family  as  wage 
earners.  Where  the  families  are  too  large  for  the  farm,  some 
of  the  members  work  for  other  families.  While  this  is  the  rule, 
there  are  numerous  exceptions.  It  is  by  no  means  uncommon 
to  find  a  cottage  on  the  farm  where  a  married  laborer  lives  and 
works  for  the  farmer. 

The  family  organization  lends  much  to  the  permanency, 
the  physical  and  mental  character,  and  to  the  means  of  control 
of  labor  in  agriculture. 

The  functions  of  man  in  agriculture  may  be  divided  into 
management  and  labor.  There  is  no  clear-cut  division  between 
the  managers  and  the  laborers  on  most  farms  in  the  United 
States.  The  organization  is  usually  more  or  less  democratic. 
The  farmer  or  manager  participates  in  the  labor  of  the  farm, 
and  the  other  workers  usually  feel  free  to  make  suggestions 
regarding  the  management. 

The  managerial  functions  may  be  divided  into  two  classes: 
First,  the  function  of  determining  general  policies.  For  ex- 
ample, the  choice  of  a  farm  with  respect  to  location  and  size, 
or  the  choice  of  types  of  farming  with  respect  to  crops  to  grow 
and  live  stock  to  keep,  are  questions  which  require  careful 
deliberation.  Second,  the  function  of  immediate  supervision 
of  the  work.  The  projecting  of  the  program  of  the  day,  and 
the  meeting  of  emergencies  as  they  arise  require  alertness  of 
mind  if  the  labor  is  to  be  directed  with  best  results.  Since 
every  farmer  must  perform  both  of  these  functions,  it  is  evident 
that  farming  is  a  business  requiring  men  of  many  qualities. 

Farmers  vary  greatly  in  their  ability  as  managers  and  as 

workmen.     This  is  a  matter  of  common  observation.     J.  E.  T. 

Rogers  ^  says,  "  Just  as  one  field  may  grow  more  corn  than 

another  field,  without  putting  the  farmer  to  any  greater  cost  in 

1  "Social  Economy,"  pp.  36-37.^ 


I04 


AGRICULTURAL  ECONOMICS 


Ranges  and  Frequencies  of  Labor  Incomes. 


FiGTTBE  6.  —  The  location  of  each  dot  in  this  chart  indicates  the  labor  income, 
i.e.  the  personal  net  earnings  of  one  farmer.  The  wide  range  in  earnings  indicates 
a  wide  range  in  the  ability  of  the  60  farmers,  living  near  Verona,  Wis.,  whose 
records  are  the  basis  of  this  chart.  The  farmers  whose  incomes  are  indicated  by  the 
shaded  dots  received  food  and  shelter  ranging  in  value  up  to  about  $  500.  The 
white  dots  represent  the  fanners  who  lost  money  as  well  as  their  time. 


THE  HUMAN  BASIS  OF  AGRICULTURAL  PRODUCTION     105 

cultivating  it,  —  just  as  a  shop  in  one  street  may  be  more  suit- 
able for  business  than  an  equally  good  shop  in  another  street,  — 
just  as  one  mine  may  yield  more  coal  or  iron  than  another  mine, 
while  the  cost  of  working  both  is  the  same,  and  so  on  with  a 
variety  of  other  such  naturally  useful  objects,  —  so  one  man 
may,  with  no  greater  cost  of  preparation  than  his  neighbor, 
earn  a  great  deal  more  than  that  neighbor.  There  is  a  superior 
fertility  of  certain  fields,  a  greater  profit  to  be  got  in  certain 
places,  richer  veins  in  certain  mines,  and  similarly  there  is  a 
greater  natural  power  in  certain  minds.  Two  lawyers  may  have 
the  same  education  and  be  equally  diligent,  but  one  may  earn 
hundreds  where  another  only  earns  tens.  Two  physicians 
may  have  had  the  same  advantages  of  study,  and  have  equally 
striven  to  profit  by  their  opportunities,  and  one  may  make  a 
fortune  while  the  other  can  barely  earn  a  living. 

"  Now  in  the  case  of  the  field,  the  shop,  and  the  mine,  it  is 
easy  to  measure  the  natural  advantage  which  the  more  favored 
possess  over  the  less.  ...  It  is  not  so  easy,  however,  to  meas- 
ure the  advantage  which  superior  abiUties  give  some  persons 
over  others  who  work  in  the  same  calHng ;  but  they  are  none  the 
less  real  and  solid." 

There  are,  likewise,  differences  in  men's  bodies.  These  differ- 
ences are  easily  recognized,  but  before  giving  further  attention 
to  the  significance  of  these  differences,  an  attempt  will  be  made 
to  outline  the  qualities  of  men  which  are  essential  to  success. 

Health  and  strength  are  essential  qualities  of  the  farmer. 
There  are  tasks  on  the  farm  which  require  skill  rather  than 
muscle,  yet  when  the  workman  on  the  farm  is  followed  from 
task  to  task  and  from  day  to  day  there  is  a  great  deal  of  work 
found  which  requires  plain  muscular  strength,  tasks  in  the 
performance  of  which  the  strong  man  may  move  with  ease, 
whereas  the  weakling  will  wrestle  without  results.  Two 
weak-muscled  men  are  often  required  to  do  the  work  of  one 
strong  man,  and  it  often  happens  that  a  fine  team  of  horses 
stands  entirely  too  long,  awaiting  the  loading  of  the  wagon, 
simply  because  adequate  human  brawn  is  lacking.  The  man 
with  ill  health,  who  is  often  unable  to  work,  has  little  hope  for 


I06  AGRICULTURAL  ECONOMICS 

success  on  the  farm.  The  tasks  of  the  farm  must  be  done 
at  the  right  time.  The  farmer  cannot  drop  out  for  a  day  or 
a  week  and  come  back  and  pick  up  the  work  where  he  left  off. 
There  is  no  place  for  the  weakling  on  the  farm. 

Skill  in  the  variety  of  tasks  of  the  farm  is  essential  if  one  is  to 
earn  anything  farming.  The  man  without  skill  often  earns 
less  than  nothing  for  the  reason  that  he  is  associated  with  land 
and  equipments  which  possess  potential  powers  of  production 
which  may  not  be  realized  upon  if  not  properly  handled.  For 
example,  four  horses  and  a  gang  plow  cost  about  50  cents  an 
hour  and  should  plow  about  half  an  acre  per  hour.  If  an  un- 
skilled plowman  fails  to  plow  more  than  one -third  of  an  acre 
in  an  hour,  the  loss  in  the  utilization  of  horse  labor  is  enough  to 
hire  a  skilled  plowman.  In  feeding  a  calf,  the  unskilled  feeder 
endangers  the  life  of  the  calf  twice  a  day  and  often  occasions 
losses  much  greater  than  the  amounts  required  to  hire  a  skilled 
calf  feeder. 

No  premium  is  usually  paid  for  ordinary  skill  in  farming  over 
what  the  unskilled  worker  gets  in  other  lines,  for  the  reason 
that  farmers  of  ordinary  skill  are  abundant,  and  there  is  no 
alternative  use  for  such  skill.  More  people  are  trained  in 
agriculture  than  are  needed  for  the  farms.  What  is  not  scarce 
has  no  value,  and  yet  the  young  man  without  farm  rearing  who 
undertakes  farming  has  before  him  the  problem  of  acquiring 
skill  at  a  time  in  life  when  it  is  expensive  to  acquire.  No 
time  is  lost  when  a  small  boy  picks  up  one  by  one  the  "  tricks 
of  the  trade  "  and  the  skill  of  hand  needed  on  the  farm,  but  if  a 
grown  person  has  this  skill  to  acquire  he  should  not  hope  to  se- 
cure very  high  wages  while  he  is  acquiring  it.  In  fact,  the  farmer 
can  scarcely  afford  to  take  a  man  without  farm  experience 
without  charging  him  for  the  privilege  of  acquiring  skill.  It 
usually  happens,  however,  that  there  are  unskilled  tasks  about 
the  farm  at  which  the  workman  can  earn  something,  although 
at  the  more  important  tasks  he  may  be  earning  nothing  or  even 
losing  money  for  the  farmer. 

The  workman  should  be  capable  of  making  suggestions  which 
may  improve  the  quality  of  the  work  he  is  doing.    Ingenuity 


THE  HUMAN  BASIS  OF  AGRICULTURAL  PRODUCTION      107 

in  improvising  means  of  accomplishing  the  task  assigned  him  is 
usually  desirable  if  not  associated  with  a  stubborn  disposition 
wliich  makes  the  workman  unhappy  if  he  cannot  have  the  priv- 
ilege of  making  changes  in  methods  without  the  approval  of 
the  manager.  It  is  a  fine  quaHty  to  be  able  to  suggest  changes 
without  any  insistence  that  they  be  introduced  contrary  to  the 
judgment  of  the  employer. 

The  work  habit  is  essential  to  a  satisfactory  workman.  One 
who  is  industrious  by  habit  enjoys  his  work  and  would  rather 
work  than  be  idle ;  putting  forth  his  muscular  energy  is  a  joy 
to  him.  This  is  markedly  in  contrast  to  the  lazy  person  for 
whom  every  action  requires  will-power  to  overcome  the  pain  of 
exertion.  It  is  the  latter  class  who  are  always  pulling  back, 
setting  a  slow  pace  for  the  crew,  and  stirring  up  discontent. 
There  is  no  place  on  a  good  farm  for  a  man  who  does  not  enjoy 
work. 

A  clear  vision  of  what  is  to  be  done  is  essential  to  both  the 
functions,  —  management  and  labor.  Ability  to  arrange  the 
work  in  such  a  manner  as  to  get  a  maximum  of  result  with  a 
given  outlay  is  essential  to  good  management.  A  clear  mental 
picture  of  the  work  to  be  done,  and  how  it  may  best  be  done 
makes  farm  management  an  easy  task.  Without  this  vision 
a  manager  is  a  bhnd  leader. 

Good  ntdgment  in  deciding  what  to  do  at  a  given  time  and  what 
to  leave  undone  requires  both  knowledge  of  farming  as  well  as 
experience  in  farming.  Every  workman  must  take  a  share  of 
the  responsibility  for  the  successful  operation  of  the  farm; 
hence  it  is  important  that  every  man  on  the  farm  possess  good 
judgment.  Judgment  is  required  in  tightening  a  nut  on  a  plow 
bolt,  for  if  left  loose  it  will  come  off,  and  if  turned  too  tight  it 
may  break  and  delay  the  work.  Judgment  is  required  in  feed- 
ing and  in  watering  a  horse,  to  say  nothing  of  the  judgment 
required  in  fitting  a  collar  to  a  horse  in  such  a  manner  as  to 
keep  the  shoulders  sound  and  in  good  working  order.  Then, 
again,  judgment  is  required  in  setting  and  holding  a  plow  or  a 
cultivator,  and  in  a  thousand  and  one  other  things  which  arise 
in  succession  from  day  to  day  through  the  year. 


Io8  AGRICULTURAL  ECONOMICS 

Knowledge  is  essential  to  good  judgment.  Knowledge  of 
crops,  live  stock,  and  machinery  is  essential  to  intelligent  man- 
agement. This  knowledge  should  include  the  needs  of  the 
various  crops  and  live  stock,  and  the  results  which  may  normally 
be  expected  in  terms  of  the  physical  productivity  of  each.  This 
is  not  all  that  is  needed,  however.  In  order  to  decide  intelli- 
gently on  what  to  produce,  it  is  necessary  to  know  the  prices 
which  may  be  secured  for  each  product  of  the  farm  and  the 
price  which  must  be  paid  for  the  use  of  land,  labor,  and  equip- 
ments. The  former  knowledge  comprises  the  physics,  chemistry, 
and  biology  of  farm  management ;  the  latter  is  the  center  of 
the  economics  of  farm  management.  It  is  only  the  active- 
minded  man  who  continually  looks  for  new  information  who 
will  keep  informed  in  all  these  branches  of  knowledge  which 
form  the  basis  of  rational  farm  management. 

Ability  to  give  and  to  receive  directions  and  explanations  relating 
to  the  work  is  very  important.  The  tasks  of  the  farm  are 
spread  over  so  much  territory  that  each  workman  is  largely 
self-directive  in  the  carrying  out  of  the  work  of  the  farm.  The 
ability  to  hold  conditions  in  mind  in  giving  instructions,  and 
to  hold  instructions  in  mind  when  carrying  out  the  work  is 
very  important  to  the  success  of  the  operation.  A  workman 
should  require  to  be  told  but  once  the  depth  the  ground  is  to 
be  plowed  in  a  given  field  for  a  given  purpose,  the  course  to 
take  in  harrowing  the  plowed  field  the  first  time  after  plowing, 
the  policy  of  the  manager  with  regard  to  deep  and  shallow 
cultivation  of  corn,  the  system  of  feeding  the  horses  and  each 
other  variety  of  live  stock,  the  approved  method  of  milking 
cows,  and  many  other  details.  A  man  who  forgets  what  he  is 
told  and  does  as  he  likes  may  prove  an  unsatisfactory  workman, 
and  certainly  will  unless  he  is  very  wise  in  directing  his  energies 
in  the  interest  of  the  proprietor. 

Self-control  is  one  of  the  very  important  qualifications  of  the 
farm  manager.  He  who  cannot  control  himself  will  have  little 
success  in  controlling  others.  Self-control  is  also  essential  to 
rational  decision  on  crops  to  grow  and  live  stock  to  keep.  The 
man  who  lets  his  likes  and  dislikes  take  precedence  over  facts 


THE  HUMAN   BASIS  OF  AGRICULTURAL  PRODUCTION    lOQ 

and  figures  will  certainly  fall  short  of  the  possible  results.  One 
who  follows  his  own  taste,  regardless  of  economic  results,  may 
temporarily  get  more  personal  satisfaction,  but  will  make  a  less 
productive  use  of  the  land.  From  the  national  point  of  view, 
such  a  one  is  an  undesirable  kind  of  farmer  in  this  one  respect 
at  least,  and  in  the  long  run  will  be  eliminated  by  competitive 
forces.  The  high-type  farmer  coolly  acts  in  conformity  with 
economic  forces,  regarding  it  as  his  duty  to  himself,  his  family, 
and  his  country  to  make  the  right  use  of  the  agencies  of  production 
and  to  deal  honestly  and  fairly  with  all  men.  It  is  not  always 
easy  to  be  fair-minded  in  a  transaction  with  a  rascal,  but  even 
here  the  emotions  should  not  lead  a  man  to  lose  control  of  him- 
self and  let  the  spirit  of  revenge  have  supremacy  over  rational 
judgment.  Self-control  is  essential  to  the  mastery  of  economic 
forces. 

Ability  to  hold  one^s  mind  on  one's  work  is  essential  to  doing 
the  work  well.  The  good  workman  who  enjoys  his  work  has 
no  trouble  on  this  score,  but  the  lazy  timeserver  usually  allows 
his  mind  to  wander  and  his  tongue  to  clatter,  which  insure  in- 
efi&ciency  of  the  employee  and  his  associates,  whereas  the  man 
with  his  mind  on  his  work  adjusts  his  operations  to  changed 
conditions  when  needed  and  is  in  a  position  to  improve  methods. 
There  is  no  place  on  the  farm  for  the  former,  but  the  latter 
makes  farming  a  joy  to  himself  and  his  associates. 

Ability  to  work  to  schedule  is  sometimes  called  the  "  time 
sense."  Even  among  men  with  the  work  habit  who  enjoy 
their  work,  some  know  how  to  keep  pace  with  time  and  turn  off 
the  work,  while  some  do  not.  Men  with  the  "  time  sense  " 
will  start  the  milking  at  the  same  time  each  day  and  finish  the 
task  without  a  variation  of  more  than  two  or  three  per  cent 
in  the  amount  of  time  required.  In  plowing  a  field  the  man  with 
the  time  sense  turns  off  a  day's  work  each  day.  He  knows 
how  many  furrows  he  must  plow  in  order  to  accompHsh  the 
amount  he  deems  a  day's  work.  He  knows  how  much  he  must 
do  each  hour,  and  as  the  railway  engineer  watches  his  schedule, 
so  does  the  good  workman  sense  the  pace  required  to  accom- 
pHsh a  day's  work.     This  is  not  so  simple  a  task  for  the  farmer 


no  AGRICULTURAL  ECONOMICS 

as  for  the  locomotive  engineer,  because  varied  work  and  tem- 
perature, the  air  movement,  the  dryness  of  the  soil,  and  the 
character  of  the  previous  crops  all  affect  the  speed  which  is 
correct  for  a  given  day.  The  schedule  must  be  figured  for  each 
combination  of  circumstances  which  presents  itself.  The 
farm  workman  who  has  the  time  sense  and  for  this  reason  works 
to  schedule  will  earn  from  $5  to  $10  per  month  more  for  this 
reason.  Much  of  the  occasion  for  long  hours  on  the  farm  can 
he  removed  by  introducing  system  and  snap  into  the  work. 

Ability  to  control  m,en  is  essential  in  the  farmer  who  is  an 
employer  of  help.  This  requires  the  ability  to  understand  the 
temperament  of  men  and  to  treat  them  in  such  a  way  as  to  bring 
out  the  action  desired  with  good  feehng  on  the  part  of  every  one. 
Fairness  in  the  treatment  of  men  is  essential  to  this  result. 
The  manager  who  feels  hke  criticizing  the  workman  for  accom- 
plishing so  little  should  assume  in  his  questions  that  an  adequate 
cause  prevented  the  man  from  accomplishing  more.  In  case 
of  uncertainty  as  to  how  much  should  be  accomplished,  the 
manager  should  put  his  hand  to  the  task.  This  will  often  make 
him  well  pleased  with  what  others  have  accomplished.  The 
manager  who  criticizes  his  workmen  on  the  basis  of  things  he  has 
imagined  to  be  true  without  making  sure  of  the  facts  will  lose 
the  confidence,  good  will,  and  respect  of  the  men  under  him, 
without  which  control  is  impossible. 

Control  is  usually  easier  where  workmen  are  young.  Boys 
who  have  been  used  to  parental  guidance  conform  more  readily 
to  directions  than  older  men  who  have  been  used  to  greater 
freedom  of  action.  The  fact  that  about  half  of  the  workers 
on  farms  in  the  United  States,  other  than  the  farmers  themselves, 
are  members  of  the  family  of  the  farmer,  greatly  facilitates 
control  of  the  workers  on  farms.  This  not  only  gives  a  paternal 
basis  for  control,  but  is  supplemented  by  the  worker's  interest 
in  the  estate  as  one  who  may  expect  to  share  in  the  inheritance. 
This  is  one  reason  why  the  family  farm  is  usually  more  success- 
ful than  the  farm  operated  by  hired  men. 

Ability  to  cooperate  with  neighbors  is  important,  especially  at 
threshing  time  and  when  the  silos  are  to  be  filled.     Good 


THE  HUMAN  BASIS  OF  AGRICULTURAL  PRODUCTION      ill 

relations  with  one's  neighbors  depends  more  upon  Uttle  things 
than  upon  important  matters.  The  cats,  the  dogs,  the  pigeons, 
or  the  pet  rabbits  are  more  hkely  to  cause  trouble  than  the 
horses  or  the  cows.  The  laws  and  customs  regulating  the 
farmer's  rights  and  privileges  with  regard  to  these  larger  animals 
are  well  established,  whereas  in  the  case  of  these  smaller  animals 
property  rights  and  restrictions  on  the  freedom  of  these  animals 
are  not  so  well  established.  Generosity  in  these  matters  is 
essential  to  good  relations  with  one's  neighbors.  It  pays  to 
humor  one's  neighbors  in  all  small  matters.  This  done,  the 
larger  relations  are  likely  to  be  easily  adjusted. 

Faithfulness  to  the  interests  of  the  farm  is  a  quality  which 
makes  the  workman  invaluable  if  he  possesses  the  other  neces- 
sary qualifications.  This  requires  that  the  workman  put  the 
success  of  the  farm,  that  is  the  doing  of  his  work  well  and  at  the 
right  time,  above  his  own  personal  desire  for  comfort  and  enter- 
tainment. Hired  managers  are  sometimes  valueless,  and  often 
worth  much  less  than  nothing.  Unless  the  leader  is  faithful, 
little  can  be  expected  of  the  other  men.  It  sometimes  happens 
that  farmers  do  not  take  their  own  farm  work  seriously.  Such 
farmers  never  command  the  respect  of  good  workmen. 

Interest  in  one's  work  is  essential  to  faithfulness,  and  makes  it 
easy.  The  time  killer,  the  slipshod  workman,  the  man  of  un- 
even and  uncertain  pace,  the  man  of  irregular  habits  regarding 
his  eating,  sleeping,  and  social  activities,  the  man  who  likes  to 
sit  down  but  hates  to  get  up;  the  man  who  continually  uses 
intoxicating  Uquor;  or  the  man  without  hard  muscles  and  a 
clear  mind  has  a  difficult  task  before  him  even  if  he  has  a  desire 
to  do  the  square  thing,  and  tries  to  be  faithful  to  the  interests 
of  the  farm. 

One  should  carry  out  faithfully  the  plan  which  has  been  de- 
liberately decided  upon.  For  example,  there  may  be  differ- 
ences of  opinion  as  to  whether  the  corn  should  be  checked  or 
drilled.  The  workman  may  desire  to  drill  the  corn,  but  the 
manager  may  decide,  after  considering  all  the  arguments  for 
and  against  drilling,  to  have  the  corn  checked,  especially  be- 
cause he  fears  the  field  cannot  be  kept  clear  of  weeds  unless  it 


112  AGRICULTURAL  ECONOMICS 

can  be  plowed  both  ways.  Faithfulness  demands  that  the  work- 
man forget  the  contention,  and  put  forth  all  his  skill  and  energy 
in  checking  the  corn  so  that  it  can  be  cultivated  in  both  direc- 
tions with  ease.  Workmen  have  been  known  who,  under  these 
circumstances,  dehberately  ran  the  check  wire  too  loose  or  too 
tight  or  allowed  the  wire  to  creep  across  the  field  by  drawing  more 
from  one  end  than  from  the  other,  and  in  various  ways  botched 
the  job  so  that  the  corn  could  not  easily  be  cultivated  cross- 
wise, and  hence  nothing  was  gained  by  checking  instead  of 
drilling.  Such  action  is  proof  that  the  workman  is  incapable 
of  faithful  ser\ice,  and  hence  unworthy  of  his  position. 

Honesty  is  a  prime  requisite.  The  man  who  says  he  doesn't 
know,  or  who  avoids  telling  his  employer  something  which  he 
knows  and  which  the  employer  has  a  right  to  know,  is  dis- 
honest. The  man  who  breaks  a  tool  and  lays  the  parts  together 
and  assumes  to  know  nothing  about  the  accident  is  at  heart  a 
liar.  There  is  no  place  on  the  farm  for  the  liar,  because  he  can 
never  be  trusted.  The  only  safe  and  sane  way  is  for  the  work- 
man to  report  his  mistakes  and  his  accidents.  A  mistake  re- 
ported may  be  adjusted  and  forgotten,  but  a  hidden  mistake 
grows  into  a  larger  difficulty,  endangers  mutual  distrust,  and 
ultimately  the  discharge  of  the  employee.  The  only  profitable 
way  is  for  both  parties  to  be  honest  where  there  is  clearly 
something  which  ought  to  be  said.  Frankness  may  go  too  far, 
however.  Too  great  freedom  in  saying  what  one  thinks  may 
lead  to  hasty  and  ill-advised  statements.  Only  after  careful 
consideration  should  criticisms  be  made,  but  when  made  they 
should  always  be  presented  directly  to  the  one  criticized  and 
not  to  others. 

Courage  is  a  quaHty  which  adds  greatly  to  the  effectiveness 
of  a  man  in  any  Une  of  work.  It  is  important,  however,  to  dis- 
criminate between  courage  and  conceit.  Courage  is  defined  by 
Webster  as :  "  That  quality  of  mind  which  enables  one  to  en- 
counter danger  and  difficulties  with  firmness,  or  without  fear  or 
fainting  of  heart."  One  who  is  conceited,  according  to  the  same 
authority,  entertains  a  "  flattering  opinion  of  one's  self."  Con- 
ceit greatly  reduces  the  value  of  a  man  to  the  farm.    The  con- 


THE  HUMAN   BASIS  OF  AGRICULTURAL  PRODUCTION     1 13 

ceited  man  makes  mistakes  which  are  expensive  and  unneces- 
sary. Conceit  sometimes  makes  a  man  seem  courageous  who 
is  really  not  courageous  but  foolhardy.  True  courage  pre- 
supposes a  correct  estimate  of  one's  own  ability,  knowledge  of 
the  difficult  task  to  be  performed,  good  judgment  in  under- 
taking or  refusing  to  undertake  the  work,  and  resoluteness  in 
executing  the  task  if  undertaken.  Courage  greatly  increases 
the  usefulness  of  a  man  on  a  farm. 

Patience  is  another  quality  which  adds  to  the  value  of  the 
worker  on  a  farm.  A  great  variety  of  live  stock  must  be  trained 
to  do  what  is  wanted,  and  made  to  do  the  thing  while  yet  un- 
trained. The  man  who  loses  patience  loses  power.  The  man 
who  keeps  patient  conserves  his  energies,  and  that  of  the  animals 
with  which  he  is  working.  The  love  for  farm  animals  makes  it 
easy  to  be  patient  in  handling  them. 

These  physical,  intellectual,  and  moral  qualities  are  possessed 
by  farmers  in  widely  different  degrees  of  perfection.  These 
diferences  in  the  abilities  of  men  account  largely  Jar  the  dif- 
ferences in  the  profits  secured  by  diferent  farmers  and  in  the 
wages  secured  by  different  workmen.  A  satisfactory  choice  of 
workmen  on  the  part  of  employers,  or  a  wise  choice  of  employer 
on  the  part  of  workmen  requires  ability  to  judge  the  qualities 
of  men. 

It  makes  a  difference  which  laborer  is  employed.  Owing  to 
the  fact  that  men  and  equipment,  as  well  as  land,  vary  in 
their  economic  productivity,  the  total  produce  will  be  influenced 
by  the  way  in  which  the  grades  of  the  different  factors  are  as- 
sociated for  productive  activity.  The  way  in  which  this  com- 
bination should  be  made  is  the  subject  of  a  later  chapter. ' 

The  supply  of  the  human  factor.  The  human  factor  in  pro- 
duction is  less  under  direct  economic  control  with  regard  to  the 
rate  of  increase  of  supply  or  the  quality  of  the  new  increments  of 
supply  than  are  farm  equipments.  Malthus'  theory  of  popula- 
tion emphasized  that  population  tends  to  be  as  great  as  the  pro- 
ductive energy  of  the  country  will  permit.  In  the  form  in  which 
Malthus  first  stated  the  theory,  the  idea  was  emphasized  that 
the  pressure  of  population  upon  the  food  supply  would  ever  be 
I 


114  AGRICULTURAL   ECONOMICS 

such  as  to  cause  a  great  deal  of  misery.  He  later  recognized 
various  checks  on  population  other  than  poverty,  and  it  is  now 
recognized  that  the  standard  of  Hving  desired  by  a  people  will 
determine  how  much  the  population  will  increase  as  a  result  of  a 
given  increase  in  the  production  of  economic  goods.  Further- 
more, the  Darwinian  idea  of  evolution  through  the  struggle  for 
existence  and  the  survival  of  the  fittest  when  viewed  in  the 
light  of  our  present  knowledge  of  the  variations  in  the  economic 
productivity  of  men  leads  to  the  view  that  it  is  those  who  are 
less  capable  as  producers  who  are  in  danger  of  not  being  able 
to  make  a  living  in  normal  times.  This  means  that  there  is  a 
process  of  natural  selection  going  on  which  tends  to  ehminate 
the  less  efficient,  and  thus  Hft  the  average  of  human  efficiency. 
The  ultimate  good  resulting  from  this  evolution  should  not  lead 
to  ignoring  the  suffering  of  these  who  are  on  the  lower  margin. 
Society  should  care  for  them  in  a  humane  way  which  will  not 
encourage  their  reproduction. 

Whatever  else  may  be  true,  the  population  of  the  United 
States  has  increased  more  rapidly  than  has  the  land  basis  of 
agriculture,  and  it  is  a  matter  of  common  belief  that  such 
an  increase  will  continue,  and  that  workers  in  agriculture  will 
probably  increase  more  rapidly  than  the  land  basis. 

It  has  been  seen  that  the  new  increments  of  land  will  probably 
be  less  and  less  desirable  as  more  and  more  must  be  brought 
under  cultivation  to  supply  the  needs  of  man.  It  has  been 
noted  that  farm  equipments  may  ever  be  replaced  by  those  of 
the  better  quality.  The  quality  of  the  new  increments  of  supply 
of  farm  workers  may  he  improving  from  generation  to  genera- 
tion not  because  of  control,  as  is  true  of  farm'  equipment,  but 
because  of  the  existence  and  improvement  of  our  educational 
systems.  It  would  seem  at  times  that  the  inefficient  have 
large  families  and  the  efficient  small  families,  and  that  this 
militates  against  progress  in  the  average  intelligence  of  the 
farming  population.  It  is  often  said,  also,  that  education  is  a 
stepping  stone  from  the  farm  and  tends  to  sort  out  the  best 
and  take  them  from  the  country.  These  are  the  pessimistic 
points  of  view.    The  few  data  available  tend  to  show  that  the 


THE  HUMAN  BASIS  OF  AGRICULTURAL  PRODUCTION      II5 

educated  farmers  are  more  efficient  than  the  uneducated  farmers 
in  competition  with  them.  One  who  is  optimistic  by  nature 
will  believe  in  the  possibility  of  and  actual  progress  in  the  in- 
creased economic  efficiency  of  people  who  do  the  farm  work  of 
this  country.  But  if  a  person  is  by  nature  pessimistic,  he  may 
magnify  the  possibihties  of  decline  in  the  qualities  of  men  due 
to  the  fact  that  the  whole  population  gradually  gives  place  to 
the  younger  generation.  The  hope  is  in  the  educational  effort 
which  teaches  the  younger  generations  what  the  older  genera- 
tions learned  from  experience  and  experiment,  and  thus  makes 
the  wisdom  of  the  race  cumulative. 

When  the  three  factors  of  production  are  compared,  it  will  be 
noted  that  they  are  alike  in  that  the  individual  units  vary  in  eco- 
nomic productivity ;  they  are  unlike  with  respect  to  the  rate  at  which 
they  are  increasing  in  quantity  and  with  respect  to  the  quality 
of  the  new  increments  of  supply.  If  one  assumes  no  change  in 
men  and  equipments  and  a  tendency  to  increased  population 
not  limited  by  present  or  higher  standards  of  living,  it  is  logical 
to  take  a  pessimistic  view  of  the  future  of  mankind ;  but  if  one 
believes  that  the  improvements  in  the  qualities  of  men  and 
equipment  will  offset  the  declining  productivity  of  the  succeed- 
ing new  increments  of  land,  and  if  one  believes  in  the  power  of 
education  to  advance  the  standard  of  living,  it  is  easier  to  be 
hopeful. 


CHAPTER  XII 

THE  CHOICE  AND  THE  COMBINATION  OF  THE  GRADES  OF 
THE  FACTORS   OF  PRODUCTION 

It  has  been  noted  that  all  the  factors  of  production  have 
this  common  characteristic  that  they  vary  in  their  capacity 
and  in  their  efficiency.  Much  has  been  heard  in  recent  years 
about  efficiency  and  the  efficiency  movement  in  the  industries. 
About  twenty  years  ago,  at  a  time  when  some  men  occupying 
prominent  positions  in  the  field  of  economics  were  emphasizing 
the  resemblances  of  the  instruments  of  production,  with  a  view 
to  formulating  simple  and  comprehensive  principles.  Professor 
Ely  was  saying  to  his  students :  "  Give  careful  attention  to  the 
differences  in  the  economic  characteristics  of  the  instruments  of 
production.  In  these  differences  we  may  find  some  of  the 
most  significant  conditions  of  our  economic  life."  The  facts 
and  theories  which  are  presented  in  this  chapter  are  the  result 
of  taking  this  advice. 

Capacity  has  been  defined  as  power  to  receive,  absorb,  take 
into,  or  associate  with.  The  word  capacity  has  in  recent  years 
been  popularly  used  to  indicate  the  output  of  a  mill  or  factory. 
In  this  book  the  original,  and  still  the  dictionary,  meaning  of 
the  word  "  capacity  "  will  be  adhered  to.  In  this  sense  ca- 
pacity refers  to  "  input,"  not  to  output.  It  has  been  recog- 
nized since  the  days  of  Ricardo  that  land  varies  with  respect  to 
the  amount  of  labor  and  capital  which  can  be  invested  per  acre 
with  optimum  results,  that  is,  land  varies  in  capacity.  Cows 
vary  greatly  in  the  amount  of  feed  which  they  can  consume 
with  optimum  results  when  fed  with  the  same  care  and  by  the 
same  man,  hence  cows  vary  in  capacity.  The  same  thing  is 
found  true  of  every  specific  class  of  instruments  of  production 
from  milk  pails  to  threshing  machines.     Variation  in  capacity 

ii6 


THE  GRADES  OF  THE  FACTORS  OF  PRODUCTION       117 

exists  likewise  in  the  human  factor.  There  is  a  very  wide  range 
of  differences  in  men  with  respect  to  the  amounts  of  land,  labor, 
and  capital  they  can  operate.  High  capacity  is  not  always  a 
desirable  quality.  For  example,  certain  land  requires  much 
more  power  to  plow  and  more  work  with  the  pulverizer  and 
harrow  to  put  it  in  condition  for  planting  seeds,  yet  does  not 
produce  extra  large  crops  per  acre.  The  labor  of  milking  some 
cows  is  twice  as  great  as  that  required  in  milking  others,  and 
they  do  not  necessarily  produce  any  more  milk.  Capacity, 
or  the  power  to  absorb  the  other  factors,  implies  nothing  as  to 
usefulness  of  a  factor  in  cases  of  this  kind  unless  taken  in  con- 
junction with  efficiency. 

Efficiency  is  defined  as  a  ratio  between  the  energy  put  in 
and  the  results  secured.  The  efficiency  of  a  factor  of  produc- 
tion is  measured  in  terms  of  the  value  of  the  product  per  unit 
of  the  other  factors  (of  given  grades  of  efficiency)  when  as- 
sociated in  the  most  profitable  proportions.  To  illustrate, 
two  pieces  of  land  may  yield  widely  different  results  per  hour 
of  man  and  horse  labor  expended  upon  them  by  the  same  man. 
Two  cows  may  vary  widely  in  the  amount  of  butter  fat  they 
yield  per  pound  of  feed  consumed  when  the  two  cows  are  fed 
by  the  same  man  upon  the  same  feeds. 

The  relation  of  capacity,  efficiency,  and  productivity  are 
easily  understood.  The  productivity  of  a  physical  unit  of  an 
instrument  of  production,  as  an  acre  of  land  or  a  cow,  is  the 
resultant  of  capacity  and  efficiency.  The  product  divided  by 
the  capacity  equals  the  efficiency.  In  other  words,  capacity 
relates  to  "  input  " ;  efficiency  to  "  output  "  per  unit  of  "  in- 
put " ;  and  productivity  relates  to  the  total  product  per  acre 
of  land,  per  cow,  or  per  man.  The  calculation  of  efficiency 
may  be  made  in  terms  of  physical  product  or  in  terms  of  the 
value  of  the  product.  In  analyzing  the  productivity  of  cows 
and  other  movable  instruments  of  production,  physical  produc- 
tivity is  often  the  better  basis  of  comparison  because  of  differ- 
ences in  values  at  different  locations.  In  the  case  of  immovable 
instruments  of  production  the  value  of  the  product  is  the  more 
satisfactory  basis  of  comparison. 


Il8  AGRICULTURAL  ECONOMICS 

To  illustrate  the  sense  in  which  the  term  capacity  is  here  used, 
assume  that  a  given  farmer,  with  a  given  outfit  of  horses,  tools, 
and  other  equipment,  can  operate  80  acres  of  "A"  grade  land 
or  100  acres  of  "  B  "  grade  land,  farming  either  piece  to  the 
proper  degree  of  intensity  of  culture.  This  implies  that  "  A  " 
grade  land  has  greater  capacity  for  absorbing  labor  and  equip- 
ment than  "  B  "  grade  land.  Each  acre  of  the  "  A  "  grade 
land  requires  i^  per  cent  of  the  labor  and  equipment  in  question 
while  each  acre  of  "  B  "  land  absorbs  only  i  per  cent,  which 
means  that  the  capacity  of  "A"  grade  land  is  one-fourth  or 
25  per  cent  greater  than  that  of  "  B  "  grade  land. 

To  illustrate  the  idea  of  eflSciency,  assume  that  a  given  farmer 
with  a  given  outlay  for  labor  and  equipment  can  secure  a  prod- 
uct worth  $1800  on  "  A  "  grade  land  and  a  product  worth  $1600 
on  "  B  "  grade  land.  Under  these  conditions  the  "  A  "  grade 
land  would  be  said  to  have  a  higher  degree  of  efficiency  than  the 
"  B  "  grade  land.  The  difference  in  efficiency  would  be  meas- 
ured in  terms  of  the  difference  in  the  product  per  unit  of  outlay. 
One  hundred  per  cent  of  outlay  yields  $1800  in  one  case  and 
$1600  in  the  other;  $1800  is  12^  per  cent  greater  than  $1600, 
hence  "  A  "  grade  land  may  be  said  to  be  12^  per  cent  more 
efficient  than  "  B  "  grade  land.  For  further  illustration  see 
the  problems  at  the  end  of  this  chapter. 

One  should  not  be  confused  by  the  fact  that  a  given  factor 
may  have  high  capacity  or  efficiency  in  terms  of  one  other  factor 
and  low  capacity  or  efficiency  in  terms  of  another.  For  ex- 
ample, a  gang  plow  may  have  high  capacity  in  terms  of  horses 
and  low  capacity  in  terms  of  men.  The  same  plow  may  have 
high  efficiency  in  terms  of  men  and  low  efficiency  in  terms  of 
horses.  Neither  should  one  be  confused  by  the  fact  that  land 
with  high  capacity  may  have  low  efficiency  and  vice  versa, 
e.g.  heavy  clay  land  may  require  much  more  labor  per  acre 
than  a  silt  loam  and  for  this  reason,  though  the  crops  be  larger, 
the  product  per  unit  of  labor,  i.e.  the  efficiency,  may  be  smaller. 

Variation  in  the  economic  efficiency  of  land  was  emphasized 
by  Ricardo ;  variation  in  the  efficiency  of  managers  was  elabo- 
rated by  Walker.    Clark  called  attention  to  the  variation  in 


THE   GRADES  OF  THE  FACTORS  OF  PRODUCTION       1 19 

the  usefulness  of  all  the  factors,  but  failed  to  recognize  the 
distinction  between  differences  in  capacity  and  differences  in 
efficiency,  apparently  assuming  no  differences  except  differ- 
ences in  capacity.  Capacity  and  efficiency,  under  given  condi- 
tions, are  concepts  as  different  as  length  and  breadth.  For 
example,  if  the  capacity  of  a  cow  is  measured  in  terms  of  the 
land,  labor,  feed,  and  other  equipment  properly  associated 
with  her,  and  if  her  efficiency  is  measured  in  terms  of  the  value 
of  her  product  per  dollar  of  expense  for  the  other  factors,  it 
becomes  obvious  that  while  two  other  cows  of  half  the  capacity 
and  the  same  efficiency  might  be  equally  useful,  because  the 
product  per  unit  of  outlay  would  be  the  same,  two  other  cows 
with  the  same  capacity  each  as  the  one  in  question  but  possess- 
ing only  half  the  efficiency  could  not  be  substituted  for  her 
without  loss,  for  they  would  cost  twice  as  much  to  keep  and 
would  5deld  only  the  same  total  product  or  only  one-half  as 
much  per  unit  of  expenditure. 

A  few  facts  may  help  to  make  clear  the  ideas  in  mind.  In 
recent  years  a  great  deal  of  first-hand  study  has  been  made  of 
the  conditions  of  productivity  in  agriculture.  The  census 
method  and  the  accounting  method  have  been  largely  used  in 
this  work.  In  Table  V  are  found  the  results  of  a  careful  census 
of  the  farmers  centering  about  Dallas,  Barron  County,  Wiscon- 
sin. There  were  fifty-one  farmers  in  the  community.  The 
returns  which  these  farmers  secured  per  dollar  of  annual  outlay 
varied  from  77  cents  to  $3.05.  In  this  calculation  the  annual 
outlay  included  all  operating  expenses,  including  depreciation 
and  interest.  A  glance  at  the  second  column  of  figures  in 
Table  V  shows  a  variation  from  $1734  to  $293  in  the  annual 
outlay  with  which  these  farmers  associated  themselves.  The 
former  are  termed  variations  in  efficiency ;  the  latter  are  desig- 
nated differences  in  capacity.  (Though  the  writer  would 
recognize  that  perfect  adjustments  may  not  exist  with  regard 
to  the  amount  of  land,  labor,  and  equipment  associated  with 
some  of  the  men,  yet  these  men  are  probably  striving  for  the 
optimum.)  The  variations  in  total  product  per  man  range 
from  $3644  to  $686.    The  farmers,  as  the  residual  claimants, 


120 


AGRICULTURAL  ECONOMICS 


TABLE  V 

Variations  in  Efficiency  and  Capacity 


Efficiencv 

Capacity 

Productivity 

Rank 

Product  per 
Dollar  of 
Outlay 

Rank 

Annual 
Outlay 

Rank 

Total  Value 
of  Product 

Rank 

Residuum 
for  Farmer's 

Effort 

I 

$3-05 

48 

$  421 

37 

$1285 

18 

$  864 

2 

2.84 

33 

932 

8 

2649 

4 

1717 

3 

2.63 

47 

434 

41 

1 143 

22 

709 

4 

2.48 

51 

293 

48 

727 

34 

434 

5 

2.40 

49 

2,2,2, 

46 

799 

32 

466 

ui 

6 

2.16 

4 

1683 

I 

3644 

I 

1961 

1 

7 

2.13 

16 

1334 

7 

2844 

6 

1510 

"" 

8 

2.12 

39 

775 

26 

1646 

16 

871 

»o 

9 

2. II 

29 

1026 

16 

2165 

12 

1139 

ZJ 

lO 

2.10 

13 

1379 

6 

2895 

5 

1516 

o 

II 

2.10 

32 

961 

18 

2018 

13 

1057 

^ 

12 

2.09 

I 

1734 

2 

3619 

2 

188s 

X> 

13 

2.07 

5 

1675 

3 

3473 

3 

1798 

ft) 

J3 

14 

2.05 

21 

1303 

10 

2472 

8 

1269 

H 

15 

2.03 

30 

983 

19 

2000 

10 

1017 

i6 

1.90 

50 

395 

49 

749 

41 

354 

17 

1.88 

15 

1344 

9 

2533 

II 

1 189 

i8 

1.86 

6 

1618 

4 

3016 

7 

1398 

19 

1.84 

42 

739 

3Z 

1361 

26 

622 

20 

1.83 

37 

881 

27 

1610 

21 

729 

32 

1.56 

46 

440 

51 

686 

44 

246 

33 

1-52 

40 

764 

39 

1162 

37 

398 

34 

1.52 

22 

"73 

25 

1778 

27 

60s 

35 

1.48 

7 

1595 

II 

2358 

20 

763 

36 

1.47 

27 

1090 

28 

1602 

31 

5" 

37 

1.47 

31 

978 

31 

1435 

33 

457 

38 

1.38 

14 

1358 

23 

1878 

30 

520 

d 

39 

1-37 

2 

1703 

12 

2339 

24 

636 

tt 

40 

1.36 

8 

1595 

17 

2165 

28 

570 

g 

41 

1.29 

28 

1018 

36 

1309 

42 

291 

o 

42 

1.26 

9 

1505 

21 

1898 

39 

393 

43 

1.24 

10 

1492 

24 

1853 

40 

361 

44 

1.24 

20 

1211 

30 

1496 

43 

28s 

45 

1.20 

25 

1 103 

35 

1320 

45 

217 

46 

I. II 

26 

1095 

38 

1219 

46 

124 

47 

1.08 

34 

932 

44 

1009 

48 

77 

48 

1.07 

19 

1263 

34 

1348 

47 

8S 

49 

1.02 

41 

742 

47 

759 

49 

17 

SO 

.88 

38 

804 

50 

713 

50 

91 

,51 

•77 

II 

1469 

42 

H31 

51 

-338 

Average 

$1.66 

$1079.8 

$1797-2 

$717.4 

THE  GRADES  OF  THE  FACTORS  OF  PRODUCTION       I2I 

received  payments  for  their  efiforts  varying  from  $1961  to 
minus  $338.  It  will  be  noted  that,  so  far  as  the  figures  in  this 
table  go,  there  is  no  definite  relation  between  a  man's  capacity 
as  measured  by  his  outlay  and  his  efficiency  as  measured  by 
product  per  unit  of  outlay.  A  man  with  high  efficiency  may 
have  low  capacity  and  the  man  with  high  capacity  may  have 
any  degree  of  efficiency.  These  facts  are  brought  forward  to 
illustrate  the  well-known  fact  of  variations  in  the  ability  of 
men  and  to  note  that  at  least  two  measuring  sticks  are  needed 
if  we  hope  accurately  to  measure  man's  abiHty. 

Table  VI  illustrates  some  of  the  differences  which  exist  in  one 
class  of  instruments  of  production,  namely,  cows.  This  table 
shows  the  best  ten  and  the  worst  ten  of  398  cows  entered  in 
the  Wisconsin  Dairy  Cow  Competition  during  the  two  years 
1^09-1911,  each  cow  being  in  the  contest  one  year.  It  will  be 
Boted  that  the  difference  in  value  of  product  per  dollar's  worth 
of  feed  consumed  by  the  best  ten  cows  varied  from  $2.71  to 
$2.19  and  that  the  range  for  the  least  efficient  ten  cows  was 
from  $1.25  to  92  cents.  The  total  range  was  from  $2.71  to 
92  cents,  the  average  result  of  the  best  ten  was  $2.38,  and  that 
of  the  least  efficient  ten  was  $1.11.  In  Table  VI  a  common  or 
standard  price  level  was  used  in  calculating  the  cost  of  the  feed 
and  the  value  of  the  product.  It  remains,  however,  to  be  ex- 
plained that  these  cows  were  not  all  under  the  same  manage- 
ment. The  differences  in  product  per  unit  of  feed  are  due, 
therefore,  to  differences  in  the  efficiency  of  men  as  well  as  to 
differences  in  the  efficiency  of  cows.  The  cows  in  one  herd  in 
the  same  barn,  receiving  the  same  feed,  care,  and  management, 
must  be  compared  if  cow  efficiencies  are  to  be  isolated. 

The  fact  of  dijferences  in  efficiency  and  capacity  granted,  are 
they  significant  from  the  standpoint  of  production?  From  the 
point  of  view  of  the  effective  management  of  farms  the  signifi- 
cance of  this  analysis  of  the  grades  of  the  factors  of  production 
lies  in  its  relation  to  the  problem  of  right  choice  of  the  instru- 
ments of  production  which  are  to  be  combined  under  a  given 
management.  If  difference  in  market  valuations  corresponded 
to  each  man's  estimate  of  the  variations  in  the  usefulness 


122  AGRICULTURAL  ECONOMICS 

TABLE  VI 

Efficiency,  Capacity,  and  Productivity  of  the  Best  Ten  and  the 

Poorest  Ten  of  the  398  Cows  in  the  Wisconsin  Dairy  Cow 

Competition,  1909-1911 

(Feed  and  Product  Values  Standardized) 
The  Most  Efficient  Ten  Cows 


EFriCIENCV 

Capacity 

Productivity 

Rank 

Product 

per  Unit  of 

Feed 

Rank 

Value  of 
Feed  Con- 
sumed 

Rank 

Value  of 
Product 
per  Cow 

Rank 

Value  of 

Product 

Minus  Cost 

of  Feed 

I 
2 

3 
4 

5 

$2.71 
2.62 
2.60 
2.49 
2.46 

8 

5 
10 

9 

2 

$   75-32 
88.56 
64.62 
72.60 
99-83 

5 

6 

10 

9 

2 

$204.11 
200.33 
167.94 
180.60 
246.10 

4 

7 

10 

8 
2 

$128.79 
III. 77 
103.32 
108.00 
146.27 

6 

7 
8 

9 
10 

2.36 
2.34 
2.31 
2.28 
2.19 

7 
6 

3 
4 

I 

78.24 
83.88 
99.20 
94.06 
129.40 

8 

7 
3 
4 

I 

184.94 
196.06 

229-55 
214.87 
283.84 

9 
6 

3 
5 

I 

106.70 
112. 18 

130.3s 
120.81 

154-44 

Average 

of 
best  ten 

$2.38 

$88.57 

$210.83 

$122.26 

The  Least  Effi,cient  Ten  Cows 

I 

$1-25 

6 

$  77-17 

3 

$  96.69 

I 

$  19-52 

2 

1.20 

2 

96.55 

2 

"5-75 

2 

19.20 

3 

1. 18 

10 

67.28 

8 

79.10 

5 

11.82 

4 

1. 18 

9 

74.82 

6 

88.06 

4 

13-24 

S 

I-I3 

I 

103.69 

I 

117-45 

3 

13.76 

6 

I. II 

4 

82.47 

4 

91.72 

6 

9-25 

7 

1. 10 

7 

75-22 

7 

82.66 

7 

7-44 

8 

1.06 

3 

84.85 

5 

90.26 

8 

5-41 

9 

.98 

8 

76.38 

9 

75-14 

9 

1.24 

10 

.92 

5 

80.26 

10 

74.16 

10 

6.10 

Average 

of 

poorest 

ten 

$1.11 

$81.87 

$91.10 

$9.33 

THE   GRADES  OF  THE   FACTORS  OF  PRODUCTION       123 

of  these  instruments,  the  problem  of  choice  would  be  solved, 
but  this  is  not  true.  The  individual  valuations  of  given  instru- 
ments of  production  have  a  wide  range  above  and  below  the 
market  valuations. 

It  is  this  discrepancy  between  individual  and  market  valua- 
tions which  makes  it  incorrect  to  take  the  position  that  one 
dollar's  worth  of  agricultural  land,  labor,  or  equipment  is  as 
useful  to  the  farmer  as  any  other  dollar's  worth,  that  market 
prices  eliminate  the  necessity  of  careful  selection  of  the  grades 
of  the  factors  of  production.  It  is,  therefore,  necessary  for 
each  farmer  to  use  great  care  in  the  choice  of  the  productive 
agents  with  which  he  associates  himself. 

An  hypothesis  which  has  been  made  and  which  bids  fair  to 
prove  a  practical  guide  is  that  the  factors  which  possess  high  ef- 
ficiency should  usually  be  associated  together.  The  high  efficiency 
land  should  he  occupied  by  the  high  efficiency  farmer  operating 
high  efficiency  equipments.  For  example,  suppose  the  superior 
efficiency  of  "  A  "  grade  land  over  "  B  "  grade  is  due  to  its 
location  near  the  market,  so  that  while  the  physical  product 
per  unit  of  the  other  factors  (of  given  efficiency)  is  the  same  as 
on  "  B  "  land,  the  value  of  the  product  is  twice  as  great  on 
"  A  "  as  on  "  B  "  grade  land.  Assume  also  that  farmers  "  I  " 
and  "  II  "  vary  also  in  their  efficiency,  which  shows  itself  in 
the  fact  that  the  physical  product  which  "  I  "  can  grow  on  a 
given  grade  of  land  is  twice  as  great  as  that  which  '*  II  "  can 
grow.  Under  these  conditions  each  farmer  can  secure  twice  as 
much  product,  in  value,  from  the  "  A  "  grade  land,  as  from  the 
"  B  "  grade  land,  but  the  extra  product  is  twice  as  great  for 
"  I  "  as  for  "  II."  Each  man  can  afford  to  pay  more  for  "  A  " 
grade  land,  but  the  one  with  the  higher  efficiency  can  clearly 
afford  to  pay  more  than  his  less  efficient  competitor,  and  hence 
competition  will  tend  to  give  the  best  locations  to  the  most 
efficient  users. 

Variations  in  efficiency  of  two  pieces  of  land  may  be  due 
solely  to  differences  in  the  amount  of  physical  product  per  unit 
of  labor  and  equipment  put  upon  them.  In  this  case  is  it  important 
that  the  more  efficient  farmer  operate  the  more  efficient  land  ? 


124  AGRICULTURAL  ECONOMICS 

The  reply  is,  he  should  occupy  that  which  is  to  him  the  more 
efficient  land,  recognizing  the  fact  that  all  men  will  not  grade 
land  the  same  for  a  given  purpose  and  that  gradations  vary 
greatly  for  different  purposes.  Assume  our  two  pieces  of  land 
to  be  corn  land  and  that  one  piece  has  more  fertile  soil,  greater 
warmth,  better  drainage,  etc.,  so  that  each  stalk  of  corn  grows 
more  vigorously  and  yields  a  larger  ear  of  corn  and  more  fodder. 
Then  call  to  mind  the  character  of  the  differences  which  may 
exist  in  the  men.  The  more  efficient  man  uses  better  judgment 
regarding  the  time  to  plow  the  land  so  that  the  soil  is  kept  in 
good  tilth ;  he  harrows  at  the  proper  time,  driving  in  the  right 
direction  to  smooth  and  crumble  the  land,  thus  reducing  the 
holes  and  the  clods  to  a  minimum ;  he  uses  judgment  in  select- 
ing the  seed  corn,  which  makes  sure  that  each  grain  is  vigorous 
and  of  the  right  variety  for  the  particular  soil ;  he  plants  the 
optimum  amount  of  seed  at  the  optimum  depth ;  he  cultivates 
at  the  right  time ;  he  maintains  the  stand  of  corn,  that  is,  does 
not  cover  or  otherwise  destroy  the  stalks  of  corn ;  he  eliminates 
the  weeds;  he  maintains  the  soil  mulch  to  hold  the  moisture 
when  needed ;  and  he  avoids  destroying  the  corn  roots  when 
cultivating  large  corn.  For  all  these  reasons  he  has  more  corn 
plants  growing,  and  each  plant  yields  more  product. 

Is  it  not  obvious  that  this  extra  product  due  to  more  plants 
and  better  plants  better  tilled  will  be  greater  on  the  more  efficient 
than  on  the  less  efficient  land  ?  To  simplify  the  concepts  con- 
fine the  discussion  to  the  influence  of  the  stand  of  corn.  The 
more  efficient  farmer  has  95  per  cent  stand  while  the  less  effi- 
cient farmer  has  an  80  per  cent  stand  of  corn.  That  is,  where 
there  is  room  for  100  stalks  of  corn  the  one  will  grow  95  while 
the  other  will  grow  80.  Is  it  a  matter  of  some  importance  that 
these  extra  15  stalks  be  on  the  more  efficient  land,  which  means 
15  large  ears  instead  of  15  small  ears  of  corn  ?  From  the  stand- 
point of  the  competing  farmers  there  is  clearly  an  incentive  for 
the  more  efficient  farmer  to  seek  the  more  efficient  land  and  to 
outbid  his  less  efficient  competitor  for  this  land. 

The  same  principle  applies  to  the  choice  of  cows,  horses,  and 
hogs  as  to  the  choice  of  land.    A  good  cow  has  been  said  to 


THE  GRADES  OF  THE  FACTORS  OF  PRODUCTION       125 

produce  15  per  cent  less  milk  under  inefficient  care  than  under 
efficient  care,  where  other  factors  are  the  same.  Fifteen  per 
cent  of  the  product  of  efficient  cows  would  be  a  greater  loss 
than  the  same  percentage  loss  on  a  low  efficiency  cow.  Further- 
more, in  the  handling  of  a  herd  of  high  efficiency  the  efficiency 
of  the  animals  will  fall  from  decade  to  decade  under  low  effi- 
ciency management  and  improve  under  high  efficiency  manage- 
ment, so  that  regardless  of  first  choice  the  efficiency  of  the  cow 
tends  to  correspond  to  that  of  her  keeper. 

It  will  readily  be  recognized  that  gradation  of  land  and  equip- 
ments, as  well  as  men,  are  very  different  for  different  purposes. 
To  avoid  confusion  on  this  point  it  is  best  to  recognize  the 
presence  of  gardeners,  dairymen,  grain  farmers,  beef  men,  hog 
men,  sheep  men,  cotton  farmers,  tobacco  farmers,  and  various 
combinations  of  these  such  as  are  found  in  the  various  types  of 
farming  in  the  United  States  to-day.  Each  farmer  falls  into 
some  class  with  respect  to  type  of  farming.  He  has  only  to 
consider  grades  of  land  and  equipment  which  competition 
among  types  of  farming  has  left  to  his  type  and  then  choose  on 
the  basis  of  gradation  in  this  class  in  terms  of  his  ability. 

The  practical  man  who  recognized  this  principle  of  choice 
may  properly  suggest  that  its  appUcation  is  not  easy  for  the 
reason  that  it  involves  knowledge  of  one's  own  relative  efficiency 
as  well  as  that  of  land  and  each  of  the  kinds  of  equipment. 
The  truth  is,  it  takes  time  for  a  farmer  to  find  his  place  in  the 
system.  If  he  ranks  himself  too  high,  losses  will  bring  him 
down,  for  he  cannot  compete  successfully  with  his  competitors. 
If  he  rates  himself  too  low,  he  makes  some  profit  but  not  so  much 
as  if  he  had  the  use  of  more  efficient  land  and  equipment.  The 
practical  method  is  to  be  modest  in  rating  one's  self  and  gradually 
adjust  equipment  to  ability  by  taking  every  opportunity  to 
secure  more  efficient  cows,  horses,  or  machines  when  profits  are 
clearly  increased  by  the  change.  The  adjustment  to  land 
qualities  cannot  so  easily  be  made  a  gradual  process.  It  is 
often  necessary  to  change  farms.  During  the  period  of  tenancy 
is  the  time  to  work  this  point  out  so  that  when  land  is  purchased 
it  will  be  of  the  right  quality. 


126  AGRICULTURAL  ECONOMICS 

Does  it  make  any  difference  which  grades  of  capacity  are 
chosen  by  the  farm  manager?  Only  in  the  same  sense  that 
the  mason  finds  use  for  stones  of  different  sizes  in  building  a 
wall,  each  occupying  space  according  to  its  size,  where  there 
are  spaces  of  varying  dimensions  to  be  filled.  If  land  is  of  low 
capacity  more  can  be  used.  If  horses  and  cows  are  of  low 
capacity  but  of  the  desired  efl&ciency,  more  can  be  kept.  The 
workman  of  low  capacity  may  prove  the  right  choice  if  only  a 
small  increase  in  help  is  needed.  The  city  man  who  wants  to 
produce  milk  for  his  family  may  find  a  cow  of  small  capacity 
more  profitable  than  one  of  high  capacity  because  she  suppUes 
his  needs  and  he  has  no  profitable  means  of  disposing  of  the 
surplus.  The  man  who  has  small  demand  for  horse  labor  may 
find  the  small  capacity  horse  most  profitable,  while  the  man 
with  much  horse  labor  to  perform  might  find  such  a  horse  un- 
profitable ;  thus  variation  in  capacity  helps  to  adjust  the  pro- 
portions of  the  factors,  especially  where  the  scale  of  the  business 
is  small. 

In  the  choice  of  workmen  it  often  happens  that  a  man  has 
high  capacity  for  some  purposes  and  low  for  others.  For 
example,  a  boy  may  cultivate  corn,  cut  hay,  or  drive  a  tedder 
or  rake,  showing  the  same  capacity  as  a  man  who  has  much 
greater  capacity  than  the  boy  in  pitching  hay  in  the  field  or 
handling  the  hay  in  the  mow.  By  taking  advantage  of  these 
differences  and  using  each  man  where  he  shows  the  greatest 
capacity,  profits  may  be  increased. 

There  are  various  conditions  which  retard  the  movement 
toward  the  most  economical  combination  of  the  factors.  Ig- 
norance of  better  opportunities  and  desire  to  stay  where  one's 
folks  live  are  common  hindrances  to  adjustment.  Inherited 
wealth  often  enables  an  inefficient  man  to  hold  a  highly  efficient 
piece  of  land  for  a  lifetime  without  being  crowded  out,  whereas 
the  same  man  would  have  found  his  level  in  a  few  years  with- 
out the  aid  of  his  inheritance. 

How  does  the  right  combination  of  efficiency  grades  affect 
total  productivity?  Total  productivity  of  society  is  greatly 
increased  by  the  combination  of  the  factors  which  throws  the 


THE  GRADES  OF  THE  FACTORS  OF  PRODUCTION      127 

most  efficient  factors  together.  The  productivity  of  the  in- 
efficient is  minimized,  it  is  true,  but  the  productivity  of  the 
most  efficient  is  at  the  maximum,  and  the  total  product,  it  is 
believed,  is  greater  than  any  other  combination  would  yield. 
True  social  econom.y  calls  for  this  combination,  and  it  is  these 
facts  of  variation  in  efficiency  which  give  hope  that  competition 
may  gradually  Hft  the  average  of  efficiency  by  the  elimination 
of  the  marginal  and  the  multiplication  of  the  better  and  the 
best.  So  long  as  this  process  is  in  operation  poorhouses  will 
be  needed,  but  is  it  not  cheaper  to  provide  for  the  inefficient 
in  this  way  than  to  have  them  match  their  inefficiency  with 
land  and  equipments  which  have  high  potential  productivity  ? 

Variations  in  efficiency  and  capacity  have  an  important  rela- 
tion to  the  problems  of  the  distribution  of  wealth,  with  especial 
reference  to  the  ownership  of  land.  It  is  the  wide  range  in  the 
efficiency  and  the  capacity  of  farmers  that  makes  possible  the 
saving  of  the  funds  essential  to  the  climbing  of  the  agricultural 
ladder.  Assuming  the  acceptance  of  the  theory  of  the  relation 
of  prices  of  agricultural  products  and  marginal  costs,  it  follows 
that  every  man  possessing  efficiency  superior  to  that  of  the 
marginal  farmer  may  save  from  the  surplus  and  rise  to  a  higher 
rung  on  the  agricultural  ladder.  It  would  seem  also  that  the 
man  of  high  capacity  may  save  more  than  his  competitor  of 
equal  efficiency  who  possesses  lower  capacity  on  the  assumption 
that  the  man  of  high  capacity  has  the  same  standard  of  living  as 
his  competitors. 

It  is  not  so  much  the  purpose  here  to  show  how  these  factors 
have  worked  themselves  out  as  it  is  to  show  the  individual 
farmer  how  better  to  adjust  himself  to  his  complex  environment, 
and  to  call  the  attention  of  the  agrarian  statesman  to  this  fact 
of  variations  which  are  too  often  overlooked  because  it  is  easier 
to  deal  with  the  average,  which  is  often  a  dangerous  basis  for 
practical  legislation.  From  a  political  point  of  view  this  fact 
of  variation  gives  basis  for  aid  in  education  and  for  poor  relief. 

In  choosing  a  farm  the  grade  of  land  selected  should  correspond 
to  the  degree  of  efficiency  of  the  farmer.  A  highly  efficient 
farmer  can  make  some  profit  on  any  grade  of  land.     On  the 


128  AGRICULTURAL  ECONOMICS 

most  ej05cient  land  the  chances  for  profits  are  greatest  for 
the  most  efficient  man,  but  the  chances  for  losses  are  also 
greatest  if  one  prove  to  be  less  efficient  than  his  competitors. 
The  safe  thing  for  a  young  man  to  do  is  to  rent  land  on  shares 
and  take  the  best  land  he  can  get.  If  he  handles  land  well,  he 
will  be  sought  by  the  men  who  have  the  best  farms.  This 
will  more  or  less  automatically  put  the  tenant  farmer  on  the 
land  corresponding  to  his  ability.  When  he  is  ready  to  buy  a 
farm,  his  experience  as  a  tenant  will  give  the  basis  for  judging 
whether  he  should  buy  the  choicest  land  and  pay  the  price, 
which  will  necessarily  be  high,  or  take  land  of  second  or  third 
class  for  which  the  competition  is  not  so  keen  and  for  which 
an.  appreciably  lower  price  will  be  asked. 

Having  decided  to  be  a  farmer,  the  young  man  should  next 
decide  upon  the  kind  of  farming  he  is  to  follow.  This  should 
be  settled  only  after  considering  carefully  his  personal  abilities, 
his  hkes  and  dislikes,  and  the  results  which  he  can  hope  to 
secure  in  the  various  kinds  of  farming. 

Having  settled  upon  the  kind  of  farming  to  be  followed,  one 
should  select  land  which  competitive  forces  have  set  aside  for 
this  kind  of  farming.  To  insist  on  dairying  in  a  hog  and  beef 
cattle  district,  or  to  insist  on  being  a  grain  farmer  in  a  region 
especially  suited  for  and  actually  being  used  as  a  dairy  district 
is  to  invite  failure  at  the  first  move. 

The  character  of  the  soil  is  an  important  consideration  both 
from  the  standpoint  of  total  product  per  acre  and  the  cost  per 
acre  to  operate.  It  is  too  common  for  farmers  who  are  seeking 
land  to  judge  the  land  entirely  by  the  product  per  acre  without 
looking  into  the  cost  per  acre  involved  in  growing  the  crop.  It 
costs  very  much  more  to  prepare  a  seed  bed  in  one  kind  of  soil 
than  in  another.  In  other  words,  the  power  of  the  land  to 
absorb  labor  is  very  important,  for  the  greater  the  input  per 
acre  the  fewer  the  acres  a  man  can  operate  and,  the  profit  per 
acre  being  the  same,  the  smaller  will  be  his  total  profits.  The 
starting  point,  in  determining  which  land  to  buy,  is  to  calculate 
as  best  one  can  the  total  net  return  which  can  be  secured  from 
the  different  farms  which  are  available  and  then  buy  the  one 


THE  GRADES  OF  THE  FACTORS  OF  PRODUCTION      129 

which  will  leave  the  largest  amount  as  net  profit  after  deduct- 
ing interest  on  the  price  of  the  farm,  taxes,  repairs,  and  deprecia- 
tion. 

The  proportion  of  the  time  the  land  is  in  condition  to  be 
worked  is  of  importance  in  choosing  a  farm.  This  is  especially 
important  on  a  grain  farm  where  the  field  labor  is  the  only  form 
of  directly  productive  labor.  It  is  less  important  on  a  dairy 
farm,  yet  is  not  to  be  ignored.  The  variations  in  the  amount 
of  time  the  land  is  in  condition  to  be  worked  may  be  due  to 
difierences  in  the  amounts  of  rainfall  or  to  differences  in  the 
character  of  the  soil.  Where  there  is  considerable  rainfall, 
sandy  soil  can  be  worked  many  more  days  per  month  than 
the  silt  loams,  and  either  of  these  soils  will  be  dry  enough  to 
work  more  days  per  month  than  the  heavy  clay  soils.  While 
this  is  important  in  determining  the  acres  of  corn  or  oats  one 
man  can  care  for,  having  the  land  dry  very  quickly  has  its 
drawbacks.  The  heavy  lands  may  be  far  superior  for  grazing 
and  may  yield  crops  enough  larger  to  compensate  for  the  loss 
of  time  due  to  wet  land.  An  ideal  arrangement  would  be  to 
have  more  than  one  kind  of  land  in  the  same  farm.  In  the 
absence  of  this  it  is  very  important  for  the  farmer  on  heavy 
land  to  have  productive  labor  to  do  when  he  cannot  work  in 
the  field. 

Location  with  respect  to  the  market  is  important,  but  is  in- 
volved in  the  question  of  the  efficiency  of  the  land.  The  farmer 
who  can  produce  the  most  product  on  a  given  piece  of  land 
gains  the  most  by  being  located  near  the  market,  whereas  the 
farmer  with  low  efficiency  would  gain  least  by  being  near  the 
market,  for  two  reasons :  he  would  have  less  to  haul  to  the 
market,  and  his  time  is  worth  less  for  other  work  than  hauling 
his  products. 

Sanitary  conditions  should  be  given  careful  consideration. 
A  farm  may  be  worth  less  than  nothing  if  its  occupier  is  in 
danger  of  losing  his  health  or  that  of  the  members  of  his  family 
by  hving  on  the  farm.  The  seriousness  of  conditions  of  this 
kind  depends  upon  the  ease  with  which  the  sanitary  conditions 
can  be  improved. 


130  AGRICULTURAL  ECONOMICS 

The  character  of  the  neighbors  is  worthy  of  close  inspection 
before  buying  a  farm.  The  farmer  cannot  go  it  alone.  He 
has  to  do  with  his  neighbors  continually  in  one  way  or  another. 
The  character  of  the  people  of  a  neighborhood  will  have  much 
to  do  with  the  conditions  of  the  roads,  the  absence  or  presence 
of  noxious  weeds,  the  cost  of  threshing,  silo  filling,  and  other 
farm  work  which  is  done  cooperatively.  The  moral  standards 
of  the  community  as  is  evidenced  by  the  prevalence  of  drunk- 
enness, illegitimate  children,  and  other  evils  on  the  negative  side, 
and  in  terms  of  good  schools,  effective  churches,  and  a  clean 
social  life  on  the  positive  side,  should  be  looked  into  with  great 
care.  The  moral  standards  of  a  community  stamp  themselves 
upon  the  younger  generation.  The  older  folks  not  in  sympathy 
with  the  standards  of  the  community  may  have  an  opportunity 
for  doing  some  valuable  missionary  work,  but  unless  they  use 
rare  tact  they  may  find  themselves  cut  loose  from  the  life  of 
the  community  as  a  result  of  their  efforts. 

It  should  never  be  forgotten  by  the  farmer  who  is  trying  to 
buy  a  farm  that  he  is  buying  a  home  as  well  as  a  place  to  work. 
His  life  and  that  of  his  family  may  be  influenced  more  by  the 
character  of  the  farm  and  the  community  as  a  place  to  live 
than  by  the  farm  as  a  place  to  make  money.  The  richness  of 
farm  life  consists  largely  in  things  which  money  cannot  buy. 

PROBLEMS 

1.  If  one  man  with  a  given  outfit  of  horses,  tools,  and  other  equip- 
ment can  operate  80  acres  of  "N"  grade  land  with  the  same  outfit  as 
he  can  operate  100  acres  of  "M"  grade  land,  which  land  has  the 
greater  economic  capacity  per  acre  and  how  much  greater?  (It  is 
assumed  in  all  questions  that  the  factors  are  combined  in  the  most 
profitable  proportions.) 

2.  If  ten  men  of  "E"  grade  of  economic  capacity  are  required  to 
operate  a  given  farm,  while  only  seven  men  of  "G"  grade  economic 
capacity  would  be  required,  which  men  have  the  greater  capacity  per 
man  ?    How  much  greater  ? 

3.  If  from  a  given  outlay  for  labor  and  equipment  a  given  farmer 
can  secure  a  product  worth  $80  on  "D"  land  and  a  product  worth 


J.  C.  EuVCRE 

THE   GRADES  OF  THE   FACTORS  OF  PRODUCTION      131 

$70  on  "C"  land,  which  grade  of  land  has  the  greater  economic 
efficiency?    How  much  greater  than  the  other? 

4.  With  given  land  and  given  equipment,  farmer  "A"  produced 
$80  worth  of  product;  while  farmer  "B"  could  produce  $110  worth 
of  product;  which  farmer  has  the  greater  economic  efficiency? 
How  much  greater? 

5.  If  a  given  amount  of  labor  and  equipment  may  be  employed 
profitably  upon  100  acres  of  ''N"  land,  or  upon  120  acres  of  "M" 
land,  with  a  product  of  $1200  on  the  ''N"  land  or  a  product  of  $1400 
on  the  "M"  land,  which  land  has  the  greater  capacity?  How  much 
greater?    Which  has  the  greater  efficiency?    How  much  greater? 

6.  If  on  the  same  farm  cow  No.  8  is  kept  and  milked  at  an  annual 
cost  of  $45,  whUe  cow  No.  9  is  kept  and  milked  at  a  cost  of  $60,  and 
cow  No.  8  yields  a  product  worth  $54,  while  cow  No.  9  yields  a  prod- 
uct worth  $72,  which  cow  has  the  greater  capacity?  Which  the 
greater  efficiency  ?    How  much  greater  ? 

7.  Plow  "A"  requires  2  horses  and  one  man  and  will  plow  2  acres  a 
day.  Plow  "B"  requires  four  horses  and  one  man  and  will  plow  3I 
acres  a  day.  Compare  the  capacity  and  the  efficiency  of  these  plows 
in  terms  of  men  and  of  horses. 

8.  Workman  ''A"  can  pitch  grain  for  3  wagons  in  threshing,  while 
workman  "B"  can  keep  but  two  wagons  going,  and  each  of  "A's" 
three  wagons  hauls  30  per  cent  more  grain  in  a  day ;  but  in  harvest- 
ing grain,  "B"  was  able  to  drive  five  horses  to  an  eight-foot  binder, 
while  "A"  was  unable  to  drive  more  than  a  three-horse  team  to  a 
six-foot  cut  binder,  and  while  "B"  cut  15  acres  of  grain  "A"  cut 
only  10  acres  per  day.  Explain  where  each  has  the  greater  capacity 
and  where  each  has  the  greater  efficiency. 


CHAPTER  XIII 
THE  PROPORTIONS  OF  THE  FACTORS  OF  PRODUCTION 

The  law  of  variable  proportions.  In  the  production  of  a  given 
crop,  like  corn,  all  the  factors  of  production,  land,  labor,  and 
equipment,  are  brought  into  play ;  but  there  is  no  definite  pro- 
portion in  which  they  must  of  necessity  be  combined  in  order 
to  bring  the  corn  crop  into  existence.  The  quantity  of  corn 
produced  on  a  given  area  of  land  will  be  gieatly  injfluenced, 
however,  by  the  amount  of  labor  and  equipment  associated 
with  the  land. 

The  law  of  increasing  and  diminishing  returns  operates  when 
increasing  amounts  of  labor  and  equipment  are  associated  with 
or  apphed  to  a  given  area  of  land.  A  small  apiount  of  labor  and 
equipment  per  acre  may  yield  20  bushels  of  corn  to  the  acre, 
double  the  amount  may  produce  45  bushels  per  acre,  whereas 
three  times  the  amount  may  produce  only  58  bushels  per  acre. 
In  the  first  instance  the  law  operates  to  give  increasing  re- 
turns, in  the  second,  diminishing  returns. 

At  any  given  time  and  place  there  is  a  certain  proportion 
in  which  the  factors  combine  most  profitably.  If  less  or  more 
than  a  certain  amount  of  labor  and  equipment  be  associated 
with  a  given  area,  the  profits  will  be  less  than  they  should  be. 
The  proportion  which  is  right  for  one  farm  at  a  given  time  may 
be  wrong  for  another.  This  may  be  due  to  differences  in  the 
physical  and  biological  character  of  the  land  or  to  differences 
in  location  with  respect  to  the  market.  Also  it  is  true  that 
the  adjustment  of  proportions  which  yield  maximum  profits 
on  a  given  farm  at  one  time  may  be  wrong  at  another  time  on 
the  same  farm.  This  will  result  when  there  is  a  change  in  the 
relative  costs  of  the  factors  of  production. 

132 


THE  PROPORTIONS  OF  THE  FACTORS  OF  PRODUCTION     133 

Changes  in  the  relative  abundance  of  the  factors  of  produc- 
tion, resulting  in  changes  in  their  relative  cost  to  the  producer, 
arise  out  of  differences  in  the  rates  of  increase  of  the  supply 
of  land,  labor,  and  equipment.  If  the  land  supply  increases 
less  rapidly  than  labor  and  equipment,  land  will  become  rela- 
tively more  valuable  and  should  be  used  more  sparingly.  As 
a  matter  of  fact,  there  was  a  period  in  the  past  century  when 
the  area  in  farms  was  increasing  more  rapidly  than  the  number 
of  farmers.  This  was  due  to  the  settlement  of  the  prairies 
aided  by  railway  transportation.  During  this  period  the  tend- 
ency was  to  use  more  land  per  man  and  the  great  scarcity  of 
men  in  the  presence  of  such  large  supplies  of  good  land  stimu- 
lated the  invention  of  machinery  of  every  sort  to  enable  man  to 
associate  himself  with  more  land.  In  recent  years  the  supply 
of  land  is  increasing  less  rapidly  and  there  is  every  reason  for 
believing  that  in  the  future  the  more  rapidly  increasing  sup- 
pKes  of  men  and  equipment  in  agriculture  will  demand  that 
land  be  cultivated  more  and  more  intensively.  This  implies 
that  the  farmers  will  need  to  be  alert  on  the  question  of  in- 
tensity of  culture. 

While  the  question  of  right  proportions,  of  wliich  intensity 
of  culture  is  one  phase,  involves  all  the  factors  equally,  it  has 
been  common  to  center  the  discussion  about  the  utihzation  of 
land.  This  has  grown  out  of  the  feeling  that  land  is  usually 
the  more  slowly  increasing  factor,  and  must  be  used  more 
intensively  as  the  years  go  by.  Hence,  intensity  of  culture 
becomes  the  central  problem  in  the  study  of  the  proportions  of  the 
factors,  though  the  proportion  between  men  and  equipment 
is  also  important  and  has  been  changing  rapidly  in  the  past 
century. 

Table  VII  compares  the  increase  in  the  acreage  of  improved 
farm  land  with  the  increase  in  the  number  of  persons  engaged 
in  agriculture  and  the  value  of  farm  implements  and  machinery 
from  1870  to  1 910.  According  to  this  table  the  land  increased 
more  rapidly  than  the  workers  up  to  the  close  of  the  19th 
century,  but  the  workers  increased  more  rapidly  than  the  land 
from  1900  to  1 910.     With  the  exception  of  one  decade,  ma- 


134 


AGRICULTURAL  ECONOMICS 


chinery  increased  more  rapidly  than  land,  and  in  every  instance 
more  rapidly  than  land  workers. 


TABLE  VII 

The  Rate  of  Increase  in  Worked  Land  and  Land  Workers 


Improved  Land  in  Farms 

Persons   Engaged 
IN  Agriculture 

Value  of  Implements 
AND  Machinery 

Acres 

T      ^^ 

Increase 

Number 

Increase 

Total  Value 

% 
Increase 

IQIO 

478,541,750 

15-4 

12,567,925 

21. 1 

1,265,149,783 

68.7 

1900 

414,498,487 

15-9 

10,381,765 

13-4 

749,775,970 

Si-7 

1890 

357,616,75s 

25.6 

9,148,448 

18.6 

494,247,467 

21.6 

1880 

248,771,042 

50.7 

7,713,87s 

29.7 

406,520,055 

SO.  I 

1870 

188,921,099 

5,948,561 

270,913,678 

1870 

to 

I9IO 

153-3 

III. I 

367.1 

Intensity  of  land  utilization  may  be  viewed  from  various 
standpoints,  as  follows : 

1.  A  given  crop  in  a  given  year  projected  in  advance  with 
a  view  to  a  general  estimate  as  to  the  right  proportion  between 
land  area  and  working  force. 

2.  A  given  crop  at  a  given  stage  in  the  progress  of  its  pro- 
duction with  a  view  to  maximum  economy  in  the  utilization 
of  the  operating  force  on  a  given  day  when  there  are  various 
demands  for  the  operating  forces. 

3.  A  given  farm  organization  as  a  whole  at  a  given  time. 
The  amount  of  farming  of  various  kinds  which  can  be  done  on  a 
given  area  with  optimum  results  with  the  understanding  that 
the  operating  capital  and  the  labor  supply  may  be  adjusted  in- 
definitely with  a  view  to  securing  maximum  economy  of  organi- 
zation for  the  farm  as  a  whole. 

4.  The  entire  agriculture  of  a  country  in  a  given  year. 

The  first,  third,  and  fourth  points  of  view  may  be  studied 
historically  and  geographically  as  well  as  at  a  given  time  and 
place. 


THE  PROPORTIONS  OF  THE  FACTORS  OF  PRODUCTION      135 

All  these  problems  may  be  studied  from  the  individual  and 
from  the  social  point  of  view. 

Standpoint  i.  Most  of  the  discussion  of  this  subject  has  been 
from  standpoint  i.  In  the  discussion  of  this  problem,  land, 
labor,  and  capital  equipments  are  assumed  to  be  at  the  disposal 
of  a  manager  (a  farmer),  who  is  attempting  to  use  men  and 
equipments  upon  land  in  the  proportions  which  will  yield 
maximum  profits  for  himself  as  the  responsible  party  who  stands 
the  losses  or  secures  the  profits.  The  problem  of  how  much 
land,  labor,  and  equipment  he  should  operate  is  another  ques- 
tion of  proportions  which  will  be  considered  in  the  chapter  on 
the  size  of  farms. 

To  illustrate  the  economic  principles  underlying  the  proper 
degree  of  intensity  of  culture  on  a  given  farm  in  the  production 
of  a  given  crop,  let  us  first  suppose  that  the  farmer  can  get  as 
much  land  of  a  given  grade  as  he  may  want  to  use,  without 
paying  anything  for  its  use.  Under  such  circumstances,  how 
many  composite  units  made  up  of  laborers  and  capital-goods 
should  be  associated  with  an  acre  of  land  ?  For  the  purpose  of 
this  illustration  let  us  assume  a  small  composite  unit,  the  use 
of  which  costs  the  farmer  one  dollar.  It  is  obvious  that  in  the 
production  of  corn,  for  example,  the  application  of  one  of  these 
units,  per  acre  of  land,  would  ordinarily  produce  very  little, 
if  any  corn  at  all.  It  is  possible  that  the  expenditure  of  two 
units  would  produce  a  small  crop ;  but  then  the  third  unit  would 
increase  the  product  more  than  the  second,  the  fourth  more 
than  the  third,  and  so  on  until  a  point  of  stationary  returns 
has  been  reached,  after  which  the  succeeding  units  may  be  said 
to  continue  for  a  time  to  add  less  and  less  to  the  total  product, 
until  a  point  may  be  reached  where  further  applications  would 
add  nothing  to  the  total  product.  Thus  in  agricultural  produc- 
tion the  returns  to  succeeding  composite  units  made  up  0}  laborers 
and  equipments  may  be  said  to  follow  the  law  of  increasing  returns 
until  a  point  of  stationary  returns  has  been  reached,  after  which  the 
law  of  diminishing  returns  per  succeeding  unit  commences  to  operate. 

This  may  be  illustrated  by  means  of  a  diagram.  In  Fig.  7 
the  composite  units  of  labor  and  capital-goods  applied  to  a  given 


136 


AGRICULTURAL  ECONOMICS 


acre  of  land  are  measured  on  the  line  AB,  commencing  at  A. 
The  line  AI'B  represents  the  increasing  and  diminishing  re- 
turns per  succeeding  unit.  Having  in  mind  land  with  a  given 
degree  of  productivity,  the  distance  between  the  lines  AB  and 
AI'B  will  depend  upon  the  degree  of  efl&ciency  possessed  by 
the  farmer,  and  also  upon  the  character  of  the  laborers  and 
capital-goods  which  he  employs.  For  this  reason  it  will  be 
necessary  to  keep  in  mind  a  given  farmer  employing  a  given 
grade  of  laborers  and  capital-goods,  as  well  as  a  given  piece  of 
land.    With  these  conditions  in  mind  we  may  speak  of  the  area 


AC'C  (Fig.  7)  as  representing  the  product  which  would  result 
if  but  one  unit  were  employed  per  acre,  and  of  the  area  CC'D'D 
as  representing  the  increase  in  the  product  due  to  the  addi- 
tion of  the  second  unit  and  so  on  for  the  succeeding  units.  As 
illustrated  in  Fig.  7,  the  product  of  each  succeeding  unit  is 
greater  than  the  one  preceding  it  until  six  units  have  been  ex- 
pended, after  which  each  succeeding  unit  may  be  said  to  5deld 
a  smaller  product  than  the  one  immediately  preceding  it. 

It  may  be  true  that  the  law  operates  to  give  stationary 
returns  per  succeeding  unit  during  the  application  of  a  few 
units,  after  the  final  point  of  increasing  return  has  been  reached 
and  before  the  starting  point  of  diminishing  returns  per  succeed- 
ing unit  has  been  reached.  It  may  be  true  also,  that  the  line 
AT  in  Fig.  7,  should  rise  rapidly  with  the  appHcation  of  one 
particular  unit,  say  the  fourth,  and  then  remain  stationary  or 
even  fall  with  the  application  of  the  fifth,  and  then  rise  very 
rapidly  again  with  the  appUcation  of  the  sixth.  The  introduc- 
tion of  drainage  or  the  use  of  commercial  fertilizers  might  bring 


THE  PROPORTIONS  OF  THE  FACTORS  OF  PRODUCTION      137 

such  a  result.  There  are  at  present  no  data  from  which  to 
calculate  the  exact  curve  which  the  returns  per  succeeding  unit 
will  follow,  but  the  general  rise  followed  by  a  general  fall  is  a 
matter  of  common  observation. 

With  this  illustration  (Fig.  7)  before  us,  suppose  the  farmer 
has  one  thousand  of  these  composite  units,  made  up  of  laborers 
and  capital-goods,  to  expend  in  agricultural  production.  In 
other  words,  suppose  that  this  farmer  has  found  that  he  can 
secure  the  largest  net  profit  when  he  operates  just  one  thousand 
of  these  units  of  labor  and  capital-goods.  With  free  land  at  his 
disposal,  how  many  acres  will  he  use  and  how  many  units  will 
he  employ  upon  each  acre?  Will  he  apply  five  units  per  acre 
and  use  two  hundred  acres  of  land?  No,  his  expenditures  will 
produce  a  greater  total  product  when  he  employs  six  units  per 
acre  and  confines  himself  to  one  hundred  and  sixty-six  and  two- 
thirds  acres.  But  will  this  make  the  labor  and  capital-goods 
most  productive?  On  first  thought  one  might  answer  yes, 
because  the  seventh  unit  adds  less  to  the  product  than  the  sixth ; 
but  upon  looking  more  closely  into  the  matter,  it  is  apparent 
that  there  is  no  good  reason  for  ceasing  to  apply  more  units 
simply  because  the  point  of  diminishing  returns  per  succeeding 
unit  has  been  reached.  The  seventh  unit  may  add  less  to  the 
total  product  than  the  sixth,  and  yet  add  more  than  any  of 
the  first  four  units,  and  the  average  product  per  unit  may  be 
greater  when  seven  units  have  been  appHed  than  when  only  six 
have  been  expended.  Hence  the  total  product  of  the  thou- 
sand units  may  be  greater  when  seven  units  have  been  appHed 
to  each  acre  and  only  one  hundred  and  forty-three  acres  of 
land  employed.  But  at  what  point  should  the  farmer  cease 
to  increase  his  applications  per  acre  of  land  ?  It  is  obvious  that 
there  is  a  limit,  that,  for  example,  a  thousand  units  expended 
upon  one  acre  of  land  in  the  production  of  Indian  com  would 
yield  a  smaller  return  per  unit  than  when  more  land  is  used  and 
the  number  of  units  applied  to  each  acre  is  more  limited.  But 
what  is  the  Hmit  ?  It  is  true  that  in  the  case  before  us  the  sixth 
unit  increases  the  total  product  more  than  any  unit  before  or 
after  it,  but  all  units  cannot  be  sixth  units.    The  first,  the  second, 


138  AGRICULTURAL  ECONOMICS 

and  the  third  are  indispensable;  and,  in  case  a  farmer  can 
manage  a  fixed  number  of  these  composite  units,  made  up  of 
capital-goods  and  laborers,  when  employed  in  the  production 
of  a  given  crop  without  reference  to  the  area  on  which  they  are 
employed,  the  highest  average  return  per  unit  is  the  thing  which 
he  should  seek,  for  with  a  fixed  cost  per  composite  unit  this  will 
enable  him  to  secure  the  largest  net  profit  per  composite  unit, 
consistent  with  the  proper  intensity  of  management,  and  hence 
will  enable  him  to  secure  the  maximum  total  net  profit  for  his 
exertion. 

In  the  illustration  (Fig.  7)  the  average  product  per  unit 
curve  AP  \s  represented  as  increasing  rapidly  until  the  sixth 
unit  has  been  applied  and  then  less  rapidly  until  a  point  is 
reached  where  the  return  per  increment  is  just  equal  to  the 
average.  At  this  point  the  average  return  per  imit  reaches  the 
maximum,  and  the  application  of  another  increment  would 
reduce  the  average  product  per  unit  employed.  The  thousand 
composite  units  are  used  in  the  most  economical  manner  when 
the  acreage  is  so  limited  that  the  number  of  units  applied  to 
each  acre  is  just  sufficient  to  yield  the  maximum  average  return 
per  unit.  For  example,  the  highest  average  return  would  be 
gained  by  the  application  of  X  units  in  the  case  before  us  in 
Fig.  7,  where  the  location  of  X  is  determined  by  the  fact  that 
the  rectangle  A  VX'X  is  drawn  in  such  a  manner  that  its  area 
equals  the  area  AI'X'X,  which  represents  the  total  product 
of  X  composite  units  of  the  two  factors  laborers  and  capital- 
goods.  That  part  of  the  rectangle  lying  between  the  line  HE' 
and  the  line  //',  for  example,  represents  the  average  return 
per  unit.  Had  the  applications  stopped  at  /,  after  the  appli- 
cation of  but  six  units,  the  total  product  would  be  represented 
by  the  area  AT  I,  or  the  rectangle  AW  NI,  and  the  average 
return  per  unit  would  have  been  less.  Likewise  had  the  appli- 
cations been  increased  to  nine  units,  the  average  return  per 
unit  would  have  fallen.  Hence  a  curve  of  increasing  and  dimin- 
ishing average  returns  may  be  drawn,  based  upon  the  increasing 
and  diminishing  returns  of  the  successive  composite  units 
of  labor  and  capital-goods.    This  curve  of  averages  is  repre- 


THE  PROPORTIONS  OF  THE  FACTORS  OF  PRODUCTION    139 

sented  by  line  AX'P  (Fig.  7),  which  is  so  drawn  that  it  will 
pass  through  the  upper  right-hand  corner  of  any  rectangle  which 
has  AC,  AD,  AE,  etc.,  or  any  part  thereof,  as  a  base  and  which 
incloses  an  area  equal  to  the  area  AC'C,  AD'D,  AE'E,  etc., 
respectively,  as  rectangles  AWN  I  and  AV  X' X  have  been 
drawn  in  Fig.  7. 

As  illustrated  in  Fig.  7,  the  curve  of  averages  reaches  the 
highest  point  at  X'  and  the  highest  average  product  per  unit 
is  gained  by  employing  seven  and  two-fifths  units  per  acre, 
and  it  will  be  seen  at  once  that,  since  all  the  charges  which  must 
be  deducted  are  a  fixed  amount  per  composite  unit  of  labor  and 
capital-goods  applied,  the  higher  the  average  return  per  unit, 
the  greater  will  be  the  farmer's  net  profit  per  composite  unit, 
and  under  the  assumption  that,  in  the  production  of  a  given 
crop,  the  same  amount  of  managerial  acti\aty  is  required  per 
composite  unit  without  regard  to  the  area  of  the  land  on  which 
it  is  employed,  and  when  there  is  no  rent  to  pay,  the  applica- 
tions should  increase  until  the  point  of  maximum  average  re- 
turns per  unit  is  reached.  This  is  the  most  extensive  agricul- 
ture that  is  consistent  with  the  greatest  net  profit  to  the  farmer 
under  any  circumstances,  in  the  production  of  a  given  crop; 
and,  under  the  above  assumption  as  to  demands  upon  managerial 
activity,  it  is  the  most  intensive  that  is  in  accord  with  the 
farmer's  highest  economic  interest,  where  the  use  of  land  may 
be  had  free. 

It  has  been  said  ^  that  the  intensity  of  culture  should  be  in- 
creased until  the  final  increment  adds  no  more  to  the  total 
product  than  enough  to  cover  the  cost  of  that  unit.  If,  in  Fig. 
7,  for  example,  the  value  of  the  product  represented  by  a  rect- 
angle whose  sides  are  KL  and  LL'  equals  the  cost  of  securing 
the  use  of  a  composite  unit,  the  applications  should,  according 
to  this  view,  be  increased  just  to  point  L.  It  is  true  that  this 
would  enable  the  farmer  to  secure  the  largest  net  profit  per  acre 
of  land,  but  unless  he  be  a  marginal  farmer,  in  which  case  the 
two  statements  coincide,  it  would  reduce  his  net  profit  per 
composite  unit  of  the  other  factors.     If  the  farmer  were  able 

1  T.  N.  Carver,  "  The  Distribution  of  Wealth,"  p.  80. 


I40 


AGRICULTURAL  ECONOMICS 


to  operate  a  given  number  of  acres  of  land  without  regard  to  the 
degree  of  intensity  of  culture,  then  it  would  be  desirable  to 
secure  the  largest  net  profit  per  acre ;  but  if  he  can,  to  advan- 
tage, manage  only  a  given  number  of  units  of  labor  and  equip- 
ment, regardless  of  the  area  on  which  it  is  expended,  then  he 
should  seek  the  largest  net  profit  per  unit  of  these  factors. 

TABLE  VIII 

Illustrating  Differences  in  Two  Methods  of  AscERTAtNiNG  the 
Proper  Degree  of  Intensity  of  Culture 


1 

Annual  Expense 

PEE  Acre  por 
Labor  and  Equip- 

2 

Value  of  Prod- 
uct Secured 

BY  — 

3 

Increment  of 
Product  Due  to 
$2.50  Incre- 
ment OF  Ex- 
penditure 

4 
Gross  Return 

PER   $1.00   OF 

Expenditure 

FOR  Labor  and 

Equipment 

6 

Net  Return 
PER  $1.00  of 
Expenditure 
($5.00  Rent 
Subtracted) 

ment 

A 

B 

A 

B 

A 

B 

A 

B 

S-oo 

7-50 

5-6i 

5.00 

3-75 

1.50 

1. 12 

•50 

•125 

7-50 

13-50 

lO.Ij 

6.00 

4-5 

1.80 

1-35 

I-I3 

.68 

lO.OO 

19.00 

14-25 

5-50 

4-1+ 

1.90 

1-425 

1.40 

-92s 

12.50 

23.27 

17-45 

4-27 

3.20 

1.866 

1.396 

1.46 

-99 

15.00 

27.07 

20.30 

3.80 

2.8s 

1-805 

1-35+ 

1.47 

1.02 

17-50 

29.60 

22.20 

2-53 

1.90 

1.69 

1.26+ 

1.41 

.98 

20.00 

31.00 

23-25 

1.40 

1.05 

i-SS 

1.16+ 

1.30 

.912 

Table  VTII  is  intended  to  show  the  difference  in  the  degree  of 
intensity  of  culture  resulting  from  the  application  of  the  two 
competing  theories  of  intensity  of  culture.  The  assumption 
here  is  that  two  men,  A  and  B,  are  farming  the  same  grade  of 
land,  but  that  while  A  is  a  superior  farmer,  B  is  a  marginal 
farmer.  Column  three  illustrates  the  degree  of  intensity  car- 
ried to  the  point  where  the  product  of  the  last  increment 
most  nearly  approximates  the  cost.  According  to  this  theory 
there  is  more  intensive  application  of  labor  and  capital  by 
A  than  by  B.  Farmer  A  could  have  made  more  profit  by  stop- 
ping at  an  earlier  point  and  using  a  proportionate  amount  of 
additional  land  with  the  additional  labor  and  capital.    Column 


THE  PROPORTIONS  OF  THE  FACTORS  OF  PRODUCTION    141 

four  shows  the  point  of  maximum  average  gross  returns  which 
would  yield  maximum  return  per  unit  of  outlay  where  no  rent 
had  to  be  paid.  Column  five  shows  the  net  return  per  dollar 
of  expenditure  after  deducting  a  five  dollar  rent.  It  will  be 
noted  that  the  payment  of  rent  tends  to  force  the  intensity  of 
culture  to  a  much  higher  point.  Note  also  that  the  degree  of 
intensity  for  farmer  B  is  the  same  in  columns  three  and  five ; 
whereas  the  superior  farmer  would  act  in  one  way  if  he  followed 
the  first  theory  and  in  another  way  if  he  followed  the  second 
theory. 

It  may  be  well  at  this  point  to  devote  a  few  Unes  to  the 
assumption,  that,  within  the  Hmits  of  the  variations  in  intensity 
of  culture  which  is  likely  to  exist  in  the  production  of  a  given 
crop,  the  same  amount  of  managerial  activity  is  required  per 
composite  unit  composed  of  the  two  factors,  laborers  and  equip- 
ment, without  regard  to  the  area  of  the  land  on  which  it  is 
employed. 

In  general,  we  believe  this  assumption  to  be  very  near  the 
truth.  In  the  production  of  corn,  for  example,  the  amount  of 
managerial  activity  required  for  each  laborer  with  the  team  and 
tools  which  are  used  by  him  would  be  the  same  whether  thirty 
acres  of  the  crop  were  cultivated  three  times,  or  the  same 
laborer  and  capital-goods  were  used  in  cultivating  twenty-two 
and  one-half  acres  of  corn  four  times.  Certainly  if  one  must 
choose  between  this  assumption  and  the  assumption  that  the 
same  amount  of  managerial  activity  is  required  for  each  acre 
of  land,  regardless  of  the  intensity  of  culture,  there  is  little 
question  as  to  the  choice.  It  is  doubtless  true  that  one  man  can 
superintend  the  operations  of  more  laborers  and  capital-goods 
when  they  are  brought  together  under  one  roof  as  in  a  large 
manufacturing  plant  than  when  they  are  distributed  over  a  vast 
area  of  land ;  but  on  the  farm  and  in  the  production  of  a  given 
crop  we  believe  that,  as  a  rule,  the  demand  upon  the  time  and 
energy  of  the  manager,  per  composite  unit  of  the  two  factors, 
laborers  and  capital-goods,  will  remain  practically  the  same 
regardless  of  the  area  on  which  such  unit  is  expended.  We 
shall  proceed,  therefore,  upon  this  assumption  in  our  attempt  to 


142  AGRICULTURAL  ECONOMICS 

ascertain  the  degree  of  intensity  of  culture  which  is  most  eco- 
nomical where  land  has  acquired  value  so  that  payment  must 
be  made  for  its  use. 

When  a  fixed  sum  per  acre  must  be  paid  for  its  use,  land  should 
be  cultivated  more  intensively  than  when  it  could  be  had  free. 
Suppose,  for  example,  that  three  dollars  per  acre  must  be  paid 
for  the  use  of  land.  We  may  think  of  this  rent  as  taking  all 
of  the  product  of  the  first  four  and  one-half,  or  R  composite 
units,  of  the  factors  applied  (Fig.  7).  In  this  discussion  we  shall 
speak  of  that  share  of  the  product  which  is  left  after  paying 
the  rent,  as  a  net  return.  The  farmer  may  be  said  to  receive 
no  net  return  from  his  expenditures  until  the  rent  is  paid. 
Should  he  cease  his  applications  when  R  units  have  been  em- 
ployed, the  product  would  just  pay  the  rent  and  he  would  lose 
the  cost  of  the  labor  and  equipment,  besides  receiving  nothing 
for  his  trouble.  Whatever  he  produces  by  further  applications 
is  the  fund  which  gives  rise  to  the  net  profits  after  the  wages 
of  hired  laborers  and  the  payment  for  the  use  of  capital-goods 
have  been  withdrawn. 

When  there  is  no  rent  to  pay,  the  farmer  seeks  the  highest 
average  gross  return  per  unit  of  expenditure ;  but,  where  a  fixed 
rent  must  be  paid,  he  no  longer  seeks  the  highest  average  gross 
return,  but  the  highest  average  net  return  per  unit,  for,  under 
the  assumption  that,  in  the  production  of  a  given  crop,  the 
amount  of  managerial  activity  per  composite  unit  of  laborers 
and  capital-goods  remains  the  same  regardless  of  the  area  on 
which  it  is  expended,  the  largest  net  return  per  composite  unit 
of  these  factors  will  enable  the  farmer  to  secure  the  largest  net 
profit  per  unit  of  managerial  activity  put  forth,  and  this  is  the 
goal  in  agricultural  production  when  viewed  from  the  stand- 
point of  the  farmer. 

The  average  net  return  per  unit  follows  the  law  of  increasing 
and  diminishing  returns  in  the  same  manner  as  the  average 
gross  return ;  but,  when  a  fixed  rent  is  paid,  the  line  of  increas- 
ing average  net  return  starts  at  point  R  (Fig.  7) ;  for  all  of  the 
product  up  to  point  R  is  required  to  pay  the  rent,  and  the  aver- 
age net  return  at  that  point  is  zero.    After  the  application  of  five 


THE  PROPORTIONS  OF  THE  FACTORS  OF  PRODUCTION     143 

units  the  average  net  return  per  unit  will  be  represented  by 
one-fifth  of  the  area  RR'  H'  H ;  for  the  total  return  minus  the 
rent  is  represented  by  the  area  RR'  H'  H,  and  since  five  units 
have  been  applied  this  net  return  must  be  divided  by  five 
to  find  the  average.  Likewise  after  the  application  of  the  sixth 
unit,  it  will  be  one-sixth  of  the  area  RR'I'I.  After  the  ap- 
plication of  the  seventh  unit,  the  average  will  be  one-seventh 
of  the  area  RR'  K'  K.  Thus  the  line  of  average  net  returns 
(Une  RY'P'  in  Fig.  7)  rises  rapidly  until  the  line  //'  is  crossed, 
after  which  it  rises  less  rapidly  until  it  crosses  the  line  I'B,  after 
which  it  falls.  When  a  fixed  rent  is  paid,  the  line  of  average 
net  returns  can  never  rise  so  high  as  the  line  of  average  gross 
returns,  and  the  point  Y',  where  the  line  of  average  net  returns 
reaches  its  maximum  distance  from  the  base  line  AB,  will 
always  be  farther  to  the  right  than  point  X' ;  and  hence  the 
highest  average  net  return  per  composite  unit  of  labor  and 
capital-goods  employed  on  land  for  which  a  fixed  rent  must 
be  paid  will  be  gained  by  a  more  intensive  culture  than  when  the 
same  land  could  be  had  rent  free. 

When  the  farmer  follows  the  rule  of  seeking  the  largest  net 
profit  for  his  exertion,  the  degree  of  intensity  of  culture  on  a 
given  piece  of  land  and  in  the  production  of  a  given  crop  will 
vary  with  the  amount  of  the  fixed  rent  which  is  paid  for  its 
use,  —  the  greater  the  amount  of  rent,  the  higher  the  degree 
of  intensity,  for  when  a  higher  rent  must  be  paid  for  the  use 
of  the  land  a  more  intensive  culture  is  necessary  if  the  highest 
average  net  return  is  to  be  secured. 

If  the  proposition  is  reversed  and  we  think  of  successive 
increments  of  land  being  brought  under  a  given  number  of 
composite  units  of  the  other  factors,  the  simple  statement  will 
sufl5ce  that  the  amount  of  land  should  be  increased  until  the 
final  increment  of  land  adds  just  enough  to  the  total  product 
to  pay  the  cost  of  securing  the  use  of  the  land.^  It  will  readily 
be  seen  that  this  would  result  in  the  degree  of  intensity  of  cul- 
ture which  will  yield  the  largest  net  return  per  composite  unit 
of  the  other  factors.  On  the  assumption,  therefore,  that  one 
1  See  "  The  Distribution  of  Wealth,"  by  T.  N.  Carver,  pp.  80-83. 


144  AGRICULTURAL  ECONOMICS 

farmer  can  manage  a  given  number  of  the  composite  units  of 
labor  and  capital-goods  without  regard  to  the  area  on  which  it 
is  expended,  the  same  conclusion  will  be  arrived  at  with  regard 
to  the  proper  degree  of  intensity  of  culture  where  land  can  be 
had  free  or  where  a  fixed  rent  must  be  paid  for  its  use,  whether 
one  adds  successive  units  of  the  other  factors  to  a  given  area 
of  land  until  the  average  net  return  per  unit  reaches  the  maxi- 
mum, or  whether  one  adds  successive  acres  of  land  to  a  given 
number  of  the  composite  units  of  the  other  factors  until  the 
final  increment  of  land  adds  just  enough  to  the  total  product 
to  pay  the  fixed  rent  which  must  be  paid  to  secure  the  use  of 
said  increment  of  land. 

The  conditions  are  practically  the  same  where  the  farmer 
owns  the  land  which  he  cultivates  as  where  he  pays  a  fixed  rent, 
the  only  difference  being  that  he  has  paid  for  the  perpetual 
use  of  the  land,  whereas  the  tenant  pays  annually  for  its  use. 

The  payment  of  a  share  rent  does  not  tend  to  increase  the 
intensity  of  culture.  The  share  rent  increases  as  the  total  prod- 
uct increases ;  and  it  may  be  thought  of  as  taking  some  fixed 
portion,  say  one-third,  of  the  product  of  each  succeeding  unit 
of  labor  and  capital-goods  applied,  so  that  the  farmer  gets 
only  two-thirds  of  the  product  of  each  unit,  and  his  share  reaches 
the  highest  average  return  per  unit  with  the  same  degree  of 
intensity  which  3delds  the  highest  average  gross  return  per 
unit.  Hence,  where  the  share  tenants  follow  their  own  self- 
interest,  they  will  farm  no  more  intensively  on  the  best  land 
when  less  productive  grades  of  land  have  been  resorted  to  than 
when  only  the  best  grade  was  cultivated. 

To  illustrate  this  point,  draw  a  curved  line  from  ^  to  5  in 
Fig.  8,  at  such  a  distance  from  lines  AI' B  and  ^5  as  to  leave 
two-thirds  of  the  area  of  each  section  between  the  lines  AB  and 
AIB.  Then  draw  a  line  through  the  points  [of  average  net 
returns  per  unit  employed,  in  the  same  way  as  the  line  of  average 
gross  returns  was  drawn.  This  new  line  of  averages  will  reach 
the  line  of  maximum  net  returns  per  unit  when  the  line  AZP' 
crosses  the  line  AIB.  The  point  Z  will  be  one-third  of  the 
distance  from  X'  to  X  and  neither  to  the  right  nor  to  the  left 


THE  PROPORTIONS  OF  THE  FACTORS  OF  PRODUCTION     145 

This  means  that  the  point  of  maximum  net  returns  is  reached, 
in  the  case  of  a  share  tenant,  with  the  appHcation  of  the  same 
number  of  units  which  yield  the  largest  average  gross  product. 

Other  things  remaining  the  same,  how  will  a  change  in  wages 
and  interest  influence  the  intensity  of  culture?  Suppose  that 
wages  and  interest  fall  twenty  per  cent ;  will  it  then  pay  the 
farmer  to  invest  more  units  per  acre?  If  the  rent  should  re- 
main the  same  as  before  the  reduction  in  wages  and  interest, 
and  if  the  foregoing  reasoning  with  regard  to  the  proper  in- 
tensity of  culture  be  true,  the  degree  of  intensity  in  terms  of 


Figure  S 


quantities  of  labor  and  capital-goods  which  would  yield  the 
largest  net  return  would  not  change;  but  the  expenditure  per 
acre  in  value  would  be  decreased  and  the  profits  of  the  farmer 
would  be  increased  in  the  same  proportion.  This  higher  profit 
might  increase  the  demand  for  land,  however,  and  this  would 
likely  result  in  a  rise  in  rents,  after  which  it  would  pay  to  in- 
crease the  quantity  of  labor  and  capital-goods  employed, 
excepting  in  the  case  of  the  share  tenant. 

The  influence  of  a  rise  or  fall  in  the  price  for  which  the  prod- 
uct can  be  sold  will  influence  the  degree  of  intensity  only 
as  it  may  affect  the  amount  of  rent  which  must  be  paid  for  the 
use  of  land.  As  prices  rise  the  rent  tends  to  rise  and  the  degree 
of  intensity  should  be  increased,  while  the  reverse  is  true  in  the 
case  of  falling  prices.  This  is  true  because  land  of  a  given  degree 
of  productivity  is  limited,  and  as  labor  and  capital-goods  increase 
in  quantity,  land  of  a  less  productive  grade  must  be  resorted  to, 
and  without  improvements  this  is  possible  only  when  wages  and 
interest  fall  or  prices  rise.    But  there  is  a  close  relation  between 


146  AGRICULTURAL  ECONOMICS 

the  gross  return  which  the  marginal  land  will  yield  and  the 
amount  of  wages  and  interest  which  labor  and  capital-goods  can 
command  on  other  grades  of  land.  This  means,  of  course,  that  as 
the  less  productive  lands  are  resorted  to  the  rent  which  the  com- 
petitors will  offer  for  the  better  land  will  rise,  and  then  the  largest 
net  return,  and  hence  the  largest  net  profit  per  composite  unit 
of  labor  and  capital-goods,  can  be  gotten  only  by  more  intensive 
culture. 

In  this  connection  the  influence  of  lower  wages  and  lower 
interest  and  higher  rents,  upon  the  choice  of  crops,  should  be 
reviewed,  because  it  often  happens  that  a  rise  in  rents  will 
result  in  the  change  from  a  crop  which  requires  but  little  ex- 
penditure for  labor  and  capital-goods  per  acre  to  one  that  re- 
quires large  expenditures  per  acre. 

That  degree  of  intensity  of  cuture  which  brings  the  largest 
net  profit  to  the  landowning  farmer  or  to  the  tenant  who  has  a 
fixed  rent  to  pay  seems  also  to  be  that  degree  of  intensity 
which  makes  the  total  amount  of  land,  labor,  capital-goods, 
and  managerial  activity  employed  in  the  agricultural  industry 
most  productive.  It  appears,  therefore,  that  at  this  point  there 
is  a  harmony  of  interests  between  the  individual  and  society 
as  a  whole;  but  it  would  seem  that  the  interest  of  the  share 
tenant  is  not  in  harmony  with  the  interest  of  society  as  a  whole 
in  this  regard,  for  if  the  better  grades  of  land  are  farmed  as 
extensively  as  the  interest  of  the  share  tenant  seems  to  dictate, 
poorer  grades  of  land  would  need  to  be  used  in  order  that  the 
labor  and  capital-goods  of  the  country  be  employed,  and  some 
of  this  labor  and  equipment  on  the  marginal  land  would  be 
creating  a  smaller  product  than  it  could  be  made  to  yield  if 
employed  in  farming  the  better  grades  of  land  to  a  more  in- 
tensive degree ;  and,  therefore,  vv^hile  a  given  share  tenant  could 
increase  his  net  profit  by  this  extensive  culture,  such  culture 
would  reduce  the  total  value  of  the  agricultural  productions  of 
the  country  as  a  whole. 

The  interest  of  the  share  tenant  is  also  out  of  harmony  with 
that  of  the  landlord  in  this  regard.  Since  it  is  to  the  interest 
of  the  landlord  that  the  share  which  accrues  to  him  as  rent 


THE  PROPORTIONS  OF  THE  FACTORS  OF  PRODUCTION    147 

shall  be  as  large  as  possible,  he  may  desire  that  the  intensity 
of  culture  be  carried  to  the  farthest  extreme.  So  long  as  an 
increment  of  expenditure  will  add  anything  to  the  product  it 
might  seem  to  his  interest  to  have  the  increment  applied,  for 
it  would  add  to  his  income.  Thus,  stated  in  its  extreme  form, 
it  would  seem  that  while  the  share  tenant  would  desire  to  farm 
so  extensively  that  the  average  gross  return  per  unit  of  labor 
and  capital  would  reach  the  maximum,  the  landlord  might 
desire  that  the  gross  return  per  acre  should  reach  its  absolute 
maximum,  without  regard  to  cost  per  unit  of  the  product. 

It  is  evident  that  the  interest  of  the  landlord  as  well  as  that 
of  the  share  tenant  is  here  in  conflict  with  the  interest  of  society 
as  a  whole ;  for  to  follow  what  seems  to  be  the  landlord's  high- 
est economic  interest  in  this  particular  would  result  in  the  re- 
duction of  the  total  agricultural  product  which  could  be  pro- 
duced with  a  given  amount  of  social  energy. 

But  it  becomes  apparent  that  the  landlord  will  always  be 
unable  to  induce  his  share  tenant  to  farm  any  more  intensively 
than  an  owner  of  land  or  a  tenant  with  a  fixed  rent  finds  it  to  his 
interest  to  farm  his  land,  for  the  tenant  could  othermse  do 
better  by  paying  a  cash  rent  or  by  taking  up  new  land  of  nom- 
inal value.  On  the  other  hand,  the  share  tenants  are,  in  the 
United  States,  quite  generally  under  the  direct  supervision  of 
the  owners  of  the  land,  who  insist  that  the  share  tenant  should 
farm  as  well  as  the  owners  would  do.  It  may  be  true  that  this 
ideal  is  not  often  perfectly  attained,  and  yet  the  tendency  is 
for  the  landlord  to  so  bring  his  influence  to  bear  upon  the  share 
tenant  that  the  social  loss  due  to  share  tenancy  is,  perhaps, 
not  very  great. 

In  fact  the  advice  of  a  landlord  who  himself  is  a  successful 
farmer  often  results  in  an  important  increase  in  the  product  of 
the  farm  to  the  benefit  not  only  of  the  landlord  and  the  tenant 
who  shares  the  profits,  but  to  the  consumer  of  the  goods. 

Standpoint  2.  We  have  here  the  more  immediate  problem  of 
determining  the  proper  intensity  of  culture  at  a  given  stage  in 
the  process  of  producing  the  crop.  This  depends  largely  upon 
the  exigencies  of  the  weather.     The  farm  manager  cannot  tell  in 


148  AGRICULTURAL  ECONOMICS 

advance  the  extent  to  which  corn  cultivation  and  clover  harvest 
will  conjQict ;  neither  can  he  know  exactly  how  much  time  there 
will  be  for  field  work.  Having  made  his  general  plan  for  the 
year,  he  must,  from  day  to  day  and  week  to  week,  distribute 
his  labor  where  it  will  count  for  most.  If  more  labor  can  be  got 
temporarily,  that  will  be  distributed  on  the  same  basis,  i.e. 
put  in  where  it  will  count  for  most.  Under  these  conditions 
the  area  has  already  been  determined,  but  unusual  weather 
conditions  may  put  the  farmer  ahead  or  behind  his  regular 
schedule.  In  either  case  the  correct  policy  is  to  make  such  use 
of  the  available  resources  as  will  add  most  to  the  total  profit 
of  the  farm  regardless  of  the  assumptions  made  in  projecting 
the  plans  at  the  beginning  of  the  year.  Plans  are  valuable 
but  emergencies  often  demand  their  readjustment. 

Staiidpoint  3.  The  problem  as  it  confronts  the  farmer  in 
action  is  found  in  standpoint  3.  How  can  the  amount  of  business 
under  a  given  farm  organization  be  increased,  i.e.  how  can  the 
gross  income  be  increased  in  such  a  manner  as  will  add  most  to 
the  farmer's  net  profit?  Take  a  dairy  farm,  for  example, 
where  the  sale  of  whole  milk  is  the  principal  source  of  income. 
To  increase  the  gross  income  means  essentially  to  increase 
the  milk  check,  (i)  The  milk  check  can  be  increased  by  im- 
proving the  sanitary  quality  of  the  milk  so  as  to  secure  a  higher 
price  for  the  product.  This  requires  greater  expenditure  for 
labor  in  the  dairy  and  on  the  milk  route,  but  makes  no  increased 
demand  for  feed  or  land.  (2)  The  milk  check  may  be  increased 
by  producing  a  greater  quantity  of  milk  of  the  same  quality. 
This  may  be  done  by : 

A.  Securing  cows  of  greater  efficiency  and  capacity.  This 
increases  the  investment  in  cows  and  makes  some  change  in 
the  demand  for  feed,  which  may  be  produced  as  a  result  of  more 
labor  on  the  farm  on  the  same  area  or  the  feed  may  be  pur- 
chased. 

B.  Securing  more  of  the  same  quality  cows,  building  greater 
bams,  hiring  more  laborers,  buying  or  raising  more  feed. 

Which  of  these  things  to  do  depends  on  relative  costs.  If 
more  feed  is  raised  it  can  be  done  by  more  intensive  culture  or 


THE  PROPORTIONS  OF  THE  FACTORS  OF  PRODUCTION    149 

by  expansion  to  a  greater  area.     Intensity  of  culture  and  the 
area  of  the  farm  are  in  a  real  sense  reciprocals. 

Standpoint  4.  Intensity  of  culture  may  be  viewed  from  the 
standpoint  of  the  entire  agriculture  of  a  country.  When 
viewed  in  a  given  year  there  is  found  a  very  wide  range  in  the 
degrees  of  intensity  in  the  different  parts  of  the  country.  On 
the  cheap  marginal  lands  the  expenditure  per  acre  is  small  and 
the  farming  is  said  to  be  extensive,  while  on  the  high-priced 
lands  near  the  markets,  the  expenditure  per  acre  is  large  and 
the  farming  is  said  to  be  intensive.  This  difference  may  be  due 
to  the  appHcation  of  more  labor  and  capital  to  a  given  kind  of 
production  or  to  the  production  on  the  higher-priced  land  of 
crops  which  require  (under  any  condition)  very  much  more 
labor  and  capital  per  acre.  For  example,  market  gardening  is 
much  more  intensive  than  wheat  growing  and  is  usually  found 
on  higher-priced  land  near  the  market. 

Likewise,  when  the  whole  country  is  viewed  geographically 
it  is  found  that  certain  kinds  of  land  are  farmed  more  intensively 
than  others  because  of  the  character  of  the  soil,  more  labor  and 
capital  being  required  to  jdeld  optimum  results  on  certain  kinds 
of  land  than  on  other  kinds  of  land.  This  simply  means  that 
the  capacity  of  certain  kinds  of  land  is  higher  than  that  of  other 
land,  due  to  differences  in  the  physical  properties  of  the  land. 

Viewed  historically,  an  increase  in  intensity  in  the  utiliza- 
tion of  land  is  the  result  of  a  relative  increase  in  the  popula- 
tion. On  the  other  hand,  a  decrease  in  population  or  an  in- 
crease in  the  available  agricultural  land  supply  will  make  a  more 
extensive  culture  desirable,  unless  improvements  in  equipments 
are  such  as  to  make  possible  the  greater  use  of  machinery,  so 
that,  while  the  application  of  human  labor  is  less  per  acre,  this 
may  be  counteracted  by  the  use  of  more  capital  per  acre,  and 
in  this  way  maintain  or  increase  the  intensity  of  culture  as  a 
basis  of  a  greater  per  capita  consumption. 

The  proportions  of  laborers  and  equipments.  In  farm  organi- 
zation it  often  happens  that  a  fixed  number  of  laborers  must  be 
combined  with  certain  equipments;  for  example,  one  man  is 
required  for  each  self-binder ;    but  in  many  cases  it  may  be  a 


150  AGRICULTURAL  ECONOMICS 

matter  of  indifference,  aside  from  the  element  of  profit,  whether 
the  work  be  done  by  hand  or  by  horse  power  and  machinery. 
In  the  production  of  wheat,  for  example,  the  proportion  of 
capital-goods  might  be  reduced  and  the  same  produce  obtained 
by  increasing  the  number  of  laborers.  The  reverse  is  also  true. 
But  while  these  variations  may  be  made  arbitrarily  they  have 
an  influence  upon  the  amount  of  the  farmer's  share  of  the  prod- 
uct. Of  all  the  various  operations  necessary  to  produce  and 
market  a  bushel  of  wheat,  some  can  be  performed  more  cheaply 
by  the  use  of  horses  and  machines,  others  by  means  of  laborers 
without  horse  power. 

Where  the  farmer's  aim  is  to  have  the  net  profit  which  is 
left  after  paying  the  hired  laborers  and  paying  for  the  use  of 
the  equipments  as  large  as  possible,  every  operation  should 
be  performed  by  laborers,  if  this  method  will  lower  the  costs 
of  production,  increase  the  product,  or  in  any  other  way  in- 
crease the  net  profits ;  and  everything  should  be  done  by  means 
of  horses  and  machines  or  other  forms  of  equipments,  which 
can  be  done  to  better  advantage  in  that  way.  It  may  often 
happen  that  the  cost  of  performing  certain  farm  operations  can 
be  reduced  by  the  use  of  horses  and  machinery  in  the  place  of 
laborers,  but  it  may  at  the  same  time  happen  that  the  product 
resulting  from  these  operations  is  also  reduced.  It  is  not 
always  true,  therefore,  that  every  operation  should  be  per- 
formed in  the  least  expensive  manner,  in  fact,  it  may  easily 
happen  that  a  more  expensive  method  will  result  in  the  largest 
net  profit. 

One  point  never  to  be  overlooked  in  considering  the  desir- 
ability of  substituting  laborers  for  equipments  or  vice  versa, 
is  the  relative  demand  which  will  be  made  upon  the  time  and 
energy  of  the  manager.  Any  change  in  the  proportions  of  these 
factors  in  the  composite  unit  which  will  increase  the  amount 
of  managerial  activity  per  such  unit  must  sufficiently  increase 
the  farmers'  net  profit  per  composite  unit  to  balance  the  loss 
which  results  from  the  fact  that  fewer  units  can  be  brought 
under  a  given  amount  of  managerial  activity. 

One  consideration  which  favors  choosing  machinery  rather 


THE  PROPORTIONS  OF  THE  FACTORS  OF  PRODUCTION    151 

than  laborers  as  a  means  of  accomplishing  a  given  result  is 
the  greater  control  over  equipments.  In  case  of  great  demands 
for  workers  in  other  localities,  laborers  may  leave  the  farmer 
with  his  crops  in  the  fields,  whereas  the  horses  and  machines  are 
certain  to  be  at  the  farmer's  disposal  when  he  wants  them. 
Laborers  can  make  themselves  more  valuable  by  becoming 
more  dependable. 

Where  the  substitution  of  the  one  factor  for  the  other  makes 
no  change  either  in  the  quantity  of  the  product  or  in  the  amount 
of  managerial  activity  required,  the  rule  is  a  simple  one :  where 
there  is  a  choice  between  using  laborers  or  capital-goods  in  the 
performance  of  certain  operations,  choose  the  cheaper  method. 
And  yet,  the  qualifying  phrases  in  this  formula  are  so  important 
that  the  problem  is  far  from  being  a  simple  one,  and  in  many 
cases,  perhaps  in  most  cases,  it  is  the  more  fundamental  prin- 
ciple of  seeking  the  largest  net  profit  per  unit  of  managerial 
activity  which  must  be  kept  uppermost  in  mind. 

A  change  in  the  rate  of  wages  without  a  corresponding  change 
in  the  cost  of  equipments,  or  vice  versa,  will  necessitate  a  read- 
justment of  the  relative  amounts  invested  in  the  employment 
of  laborers  and  in  the  employment  of  equipment.  As  wages  rise 
relatively  to  interest  and  depreciation  charges  on  equipment, 
there  should  be  less  labor  and  more  capital-goods  employed. 
Improvement  in  machinery  often  makes  it  profitable  to  substi- 
tute capital-goods  for  laborers.  The  self-binder,  the  hay- 
loader,  and  the  windmill  are  examples  where  this  has  been  true. 

PROBLEMS 

I ,  Suppose  a  farmer  who  operates  his  own  farm  with  his  own  labor 
finds  that  by  putting  all  the  time  he  can  upon  a  corn  crop  he  can 
grow: 

60  acres  of  corn  yielding  24  bu.  per  acre 
50  acres  of  corn  yielding  30  bu.  per  acre 
45  acres  of  corn  yielding  33  bu.  per  acre 
40  acres  of  corn  yielding  36  bu.  per  acre 
35  acres  of  corn  yielding  40  bu.  per  acre 
30  acres  of  corn  yielding  44  bu.  per  acre 


IS2 


AGRICULTURAL  ECONOMICS 


Which  combination  will  be  most  profitable  if  the  land  is  rent  free? 
If  a  rent  of  lo  bu.  per  acre  must  be  paid?  If  one-half  of  the  crop 
must  be  paid  as  rent  ? 

2.  To  illustrate  and  compare  the  two  points  of  view  on  the  proper 
degree  of  intensity  of  culture  in  a  given  year  on  a  given  grade  of 
land  and  in  the  production  of  a  given  crop,  let  the  following  figures 
represent  the  returns  resulting  from  the  varying  expenditures  per 
acre: 


Dollars  per  Acre 

Bushels  per  Acre  in 
Field  A 

Bushels  per  Acre  in 
Field  B 

X 

0 

0 

a 

0 

3 

3 

0 

6 

4 

0 

IS 

5 

10 

28 

0 

25 

37 

7 

38 

42 

8 

48 

46 

8.3 

49.1 

46.6 

8.4 

50.3 

47.1 

8.6 

Si-3 

47-5 

8.8 

52.3 

47.8 

9.0 

53-2 

48.0 

9.3 

54-1 

48.3 

9.4 

54-9 

48.4 

9.6 

55-7 

48.6 

9.8 

56.5 

48.8 

10.0 

57-0 

49.0 

II.O 

60.0 

49-5 

12.0 

62.0 

49.8 

I3-0 

63.0 

50.0 

14.0 

63-5 

So.i 

15 

63-5 

50.1 

(i)  Supposing  that  the  farmer  could  get  all  the  land  he  cared  to 
use,  rent  free,  either  of  the  quality  found  in  Field  A  or  Field  B,  which 
kind  of  land  would  it  pay  him  the  better  to  use  ? 

(2)  When  maize  is  worth  25  cents  per  bushel  and  a  rent  of  $2.50  per 
acre  is  charged  for  the  land  of  either  grade,  which  grade  would  prove 
the  more  profitable  to  the  farmer,  and  to  what  degree  of  intensity 
should  he  cultivate  it  ? 

(3)  In  case  the  farmer  must  give  one-third  of  the  crop  to  the  land- 
lord, as  rent,  to  what  degree  of  intensity  would  he  farm  each  of  the 


THE  PROPORTIONS  OF  THE  FACTORS  OF  PRODUCTION     153 

fields,  A  and  B,  if  he  followed  his  own  highest  economic  interest? 
To  what  degree  of  intensity  if  he  followed  the  highest  economic 
interest  of  the  landlord?  Explain  fully  how  society  as  a  whole 
would  lose  in  either  case. 

(4)  When  maize  is  worth  35  cents  per  bushel  and  the  rent  which 
must  be  paid  for  the  use  of  the  land  in  Field  A  is  $5.00  per  acre,  what 
is  the  highest  rent  which  the  farmer  could  afford  to  pay  for  the  use 
of  the  land  in  Field  B  ? 

(5)  How  would  a  rise  of  20  per  cent  in  the  cost  of  labor  and  capital- 
goods  affect  the  above  problems  ? 

(6)  How  would  the  second  problem  (2)  be  affected  if  the  price  of 
corn  shovdd  rise  to  40  cents  per  bushel  and  the  rent  shovdd  at  the 
same  time  rise  to  $4.00  ? 

(7)  How  would  problem  three  (3)  be  affected  if  the  landlord  should 
agree  to  take  twelve  and  one-half  bushels  of  maize  per  acre  instead 
of  one-third  of  the  crop  ? 

3.  In  order  to  ascertain  the  optimiun  amount  of  acid  phosphate  to 
put  upon  a  corn  field  which  is  known  to  lack  phosphate,  the  follow- 
ing varying  quantities  were  appUed  per  acre  with  the  corresponding 
results : 

50  lb.  yielded  an  increase  of  2  bushels  per  acre 
100  lb,  yielded  an  increase  of  5  bushels  per  acre 
150  lb.  yielded  an  increase  of  7^  bushels  per  acre 
200  lb.  yielded  an  increase  of  9^  bushels  per  acre 
250  lb.  yielded  an  increase  of  11  bushels  per  acre 
300  lb.  yielded  an  increase  of  12  bushels  per  acre 
350  lb.  yielded  an  increase  of  12I  bushels  per  acre 
400  lb.  yielded  an  increase  of  12^  busheb  per  acre 

The  cost  of  the  fertilizer  is  i  cent  per  lb.,  to  be  paid  for  when  corn 
is  in  crib. 
The  cost  of  application  is  50  cents  per  acre. 
The  cost  of  gathering  com  is  3  cents  per  bushel. 
The  value  of  corn  in  the  crib  is  63  cents  per  bushel. 
Determine  optimtun  appUcation  of  acid  phosphate. 


CHAPTER  XIV 
THE  SIZE  OF  FARMS 

The  size  of  farms  is  usually  measured  in  terms  of  area.  It  is 
obvious  that  all  land  is  not  equally  useful  and  that  some  uses 
of  land  make  very  different  demands  for  labor  and  capital  per 
acre  than  others.  From  certain  points  of  view,  a  20-acre 
fruit  and  vegetable  farm  may  represent  as  much  business  as  a 
thousand-acre  wheat  farm.  There  are  many  measures  which 
might  be  used.  For  example,  the  total  investment,  the  number 
of  laborers,  the  number  of  horses  used,  the  number  of  cows 
milked,  the  number  of  cattle  and  hogs  fattened,  or  the  number 
of  sheep  on  a  sheep  ranch,  may  give  a  more  accurate  basis  of 
judging  of  the  importance  of  a  given  farm  than  a  bare  state- 
ment of  area.  Area  is,  however,  common  to  all  farms,  and 
next  to  the  number  of  persons  employed,  is  perhaps  the  most 
satisfactory  starting  point  for  the  discussion  of  the  size  of  farms. 

The  farms  of  the  United  States  have  been  classified  for  statis- 
tical purposes  into  ten  size-groups  based  upon  area.  The 
table  on  the  following  page  shows  the  number  and  percentage 
of  the  farms  found  in  each  size-group  in  1910. 

This  table  shows  a  wide  range  in  the  size  of  farms  in  the 
United  States  in  1910.  A  study  of  the  tables  in  the  census 
volumes  shows  that  this  is  a  condition  of  long  standing.  A 
study  of  conditions  in  foreign  countries  shows  the  same  wide 
range  in  the  size  of  farms.  It  would  seem,  therefore,  that  there 
is  no  one  size  of  farm  which  can  be  generally  recommended, 
but  that  the  proper  size  for  a  given  farm  depends  upon  many 
variable  conditions.  It  becomes  a  matter  of  importance, 
therefore,  to  outline  the  principles  which  determine  the  size 
of  farms,  with  a  view  to  the  proper  adjustment  of  the  size  in 
the  case  of  each  individual  farmer. 

154 


THE  SIZE  OF  FARMS 

TABLE   rX 

Farms  in  the  United  States  Classified  by  Area,   1910 


155 


NnUBEE 

Percentage 

Under  3  acres 

18,033 

317,010 

504,123 

1,414,376 

1,438,069 

1,516,286 

534,191 

443,984 

125,295 

50,135 

0.3 
50 

7-9 
22.2 

3  to  9  acres  

10  to  19  acres . 

20  to  49  acres    . 

50  to  99  acres    

22.6 

100  to  174  acres 

17s  to  259  acres 

260  to  499  acres 

500  to  999  acres 

1000  acres  and  over 

23-8 
8.4 
7.0 
2.0 
0.8 

All  farms 

6,361,502 

100. 0 

While  there  is  no  one  proper  size  for  farms  in  general,  there 
is  always  a  proper  size  of  farm  for  a  given  man,  at  a  given  stage 
of  his  own  development,  on  a  given  type  of  soil,  in  a  given  line 
of  production,  with  given  labor  and  market  conditions.  In 
general,  cotton  farms  are  smaller  than  wheat  farms.  For  ex- 
ample, the  average  area  of  improved  land  in  farms  in  Bell 
County,  Texas,  where  more  than  half  the  improved  land  is  in 
cotton,  was  about  70  acres  in  1910,  whereas  the  average  was 
about  270  acres  in  Barton  County,  Kansas,  where  more  than 
half  the  improved  land  was  in  wheat.  If  Washington  County, 
Mississippi,  is  compared  with  Cass  County,  North  Dakota, 
the  contrast  is  even  more  striking.  In  the  former  county, 
the  average  area  of  improved  land  in  farms  is  23  acres ;  in  the 
latter  it  is  about  470.  In  the  Mississippi  county,  over  47  per 
cent  of  the  improved  land  was  in  cotton,  while  in  the  Dakota 
county  44  per  cent  was  in  wheat. 

These  facts  indicate  that  the  crop  grown  is  a  factor  in  deter- 
mining the  size  of  farms ;  but  that  this  force  is  not  operating 
alone  is  shown  by  the  wide  range  in  the  size  of  wheat  farms  and 
of  cotton  farms.  In  general,  the  cotton  farms  of  the  black 
prairie  of  Texas  are  larger  than  the  cotton  farms  of  the  Yazoo 
delta  in  Mississippi,  as  is  indicated  by  the  counties  compared 


IS6  AGRICULTURAL  ECONOMICS 

above.  In  Bell  County,  Texas,  more  than  96  per  cent  of  the 
farmers  are  white,  whereas  in  Washington  County,  Mississippi, 
over  95  per  cent  of  the  farmers  are  colored.  As  has  been  noted, 
the  improved  area  per  farm  is  three  times  as  great  in  the  former 
as  in  the  latter.  This  gives  a  strong  suggestion  that  the  capac- 
ity of  the  individual  farmers  is  a  potent  factor  in  determining 
the  size  of  farms. 

{.  In  1900,  farms  were  classified  by  size  and  by  principal  sources 
of  income.  The  statistics  show  a  wide  range  in  the  size  of  farms 
used  for  any  one  purpose ;  for  example,  there  were  cotton  farms 
in  every  size  group  from  under  3  acres  to  over  a  thousand 
acres,  but  the  most  common  size  was  from  20  to  50  acres. 
Hay  and  grain  farms  showed  also  a  wide  range,  but  the  most 
common  size  was  from  100  to  175  acres.  Live  stock  and  dairy 
farms  were  most  largely  in  the  group  ranging  from  50  to  175 
acres.  The  most  common  size  of  fruit  and  vegetable  farms  was 
from  20  to  50  acres.  Thus,  while  there  is  a  wide  range  in  sizes 
of  farms  in  a  given  line  of  production,  the  dominant  size  varies 
with  the  kind  of  agriculture  carried  on. 

Topography  is  a  factor  in  determining  the  size  of  farms.  In  a 
broken  country  where  the  fields  are  small  because  of  the  limited 
areas  of  plow  land  found  lying  together,  and  where  large  ma- 
chines cannot  be  used  to  advantage  because  of  the  unevenness 
of  the  ground,  the  cultivated  area  in  farms  is  usually  small. 
This  same  condition  may  result  in  large  farms  for  grazing 
purposes. 

The  climate  influences  the  size  of  farms  in  many  ways.  In 
Cahfornia,  where  the  wheat  crop  can  be  left  standing  for  some 
time  after  it  is  ripe,  a  given  crew  can  harvest  a  much  larger 
area  of  wheat  than  in  the  more  humid  regions  where  the  crop 
must  be  cared  for  in  a  few  days. 

The  number  of  days  per  week  the  land  is  dry  enough  to  work, 
during  the  season  when  crops  are  being  put  in  and  cared  for, 
is  an  important  factor  in  determining  how  many  acres  of  each 
crop  can  be  handled  per  man  and  team,  and  hence  how  large 
an  acreage  of  improved  land  will  be  found  per  farm. 

The  character  of  the  farm  work  influences  the  size  of  the 


THE  SIZE  OF  FABLMS  1 57 

unit  of  organization.  The  large  area  demanded  per  man  gives 
rise  to  two  conditions  which  point  toward  the  economy  of  a 
relatively  small  unit  of  organization  when  compared  with  many 
Unes  of  manufacture.  The  distance  which  workmen  must 
travel  in  going  to  and  from  their  work  is  against  large  farms. 
The  time  required  in  going  to  and  coming  from  the  fields  is 
subtracted  from  the  time  devoted  to  the  field  work. -^  Further- 
more, the  fact  that  the  work  is  spread  over  a  wide  area  makes 
close  supervision  of  the  workmen  impracticable.  Every 
workman  on  a  farm  must  be  interested  and  largely  self-direc- 
tive in  carrying  out  the  day's  work  if  the  farm  is  to  prove 
profitable.  This  has  resulted  in  the  major  portion  of  the  work 
on  most  farms  being  done  by  the  farmer  and  his  family. 

It  has  been  said,  "■  The  typical  American  farm  is  a  family- 
farm."  Limiting  this  statement  to  America  is  unnecessary. 
The  statement  is  equally  true  of  France  and  of  Germany.  If 
the  farms  of  the  whole  world  were  considered,  it  would  still 
be  true  that  the  typical  farm  is  a  family-farm.  The  world  over, 
farming  is  very  generally  organized  in  accordance  with  what 
has  been  called  the  "  domestic  system  "  in  industry.  There 
has  been  talk  about  the  "  factory  farm  "  and  corporation  farm- 
ing, but  nothing  of  general  economic  importance  has  been 
developed  along  this  hne.  The  family-farm  is,  for  the  present 
at  least,  the  farm  to  keep  in  mind  in  studying  the  economic 
problems  of  the  farm  manager.  Hence  the  working  force  of 
the  family  is  an  important  consideration  in  deciding  upon  the 
proper  size  of  farm  for  a  given  farmer. 

The  fact  that  adding  to  the  size  of  the  farm  adds  to  the  work 
in  the  home  and  detracts  from  the  pleasure  of  living,  tends 
to  limit  the  size  of  farms.  The  farmer  considers  the  extra 
work  for  his  wife  involved  in  taking  an  extra  man  into  the 
home.  The  writer  uses  the  word  "  home  "  advisedly.  The 
hired  man  is  not  satisfied  simply  to  eat  and  sleep  in  the  house. 
He  expects  to  be  made  to  feel  at  home,  and  if  he  does  not  feel 
at  home,  he  will  move  along  and  try  another  place.  The 
farmer  and  his  hired  man  work  side  by  side  in  the  field,  and 
in  the  barn ;   they  sit  side  by  side  at  the  table,  and  it  is  per- 


158  AGRICULTURAL  ECONOMICS 

fectly  natural  that  the  employee  should  expect  to  be  con- 
sidered a  part  of  the  family. 

The  size  of  the  farm  often  grows  with  the  family.  As  the 
boys  become  able  to  help  on  the  farm,  the  successful  farmer 
adds  to  its  size  with  a  view  to  having  enough  land  for  his 
labor  force,  and  with  a  view  to  having  a  piece  of  land  for 
each  of  the  boys  when  they  have  grown  up  and  want  to  com- 
mence farming  for  themselves.  Under  these  circumstances, 
the  splitting  up  of  the  farm  as  the  boys  start  in  on  their  own 
account  often  results  in  a  reduction  in  the  size  of  the  farm  as 
the  family  is  dispersed. 

How  will  the  decline  in  the  size  of  the  American  farm  family 
affect  the  size  of  farms?  In  the  first  place,  it  will  not  only  re- 
duce the  number  of  family  workers  per  farm,  but  will  tend  to 
reduce  the  number  of  paid  laborers  on  farms.  The  principal 
supply  of  satisfactory  farm  laborers  is  the  boys  from  farm 
families  where  the  degree  of  prosperity  has  not  been  such  as 
to  enable  the  farmer  to  expand  his  farm  so  rapidly  as  the  family 
labor  supply  has  increased.  With  the  decline  in  the  size  of 
families,  this  source  of  labor  is  greatly  reduced,  and  the  laborers 
who  can  be  drawn  from  other  sources  are  not  so  satisfactory 
from  the  point  of  view  of  being  skilled,  subject  to  control,  and 
reliable.  The  most  satisfactory  solution  of  the  farm  labor 
problem  in  many  parts  of  the  United  States  is  to  reduce  the 
size  of  the  farm  to  what  can  be  handled  by  the  family. 

There  are  those  who  would  not  carry  this  so  far  as  to  reduce 
the  labor  force  below  two  men.  "  There  are  many  farm  opera- 
tions that  require  two  men,  so  that  no  matter  how  small  the 
farm  may  be,  one  man  cannot  do  all  the  work  to  good  advan- 
tage." The  whole  question  involved  here  is  :  will  the  advantage 
of  having  another  man  right  at  hand  for  doing  the  two-man 
jobs  counterbalance  the  social  and  economic  burden  of  keep- 
ing him  all  the  time  ?  The  answer  to  this  question  depends  upon : 
(i)  the  managerial  ability  of  the  farmer  in  making  a  margin 
of  profit  on  hired  labor,  (2)  his  tact  in  handhng  men  so  as  to 
prevent  the  hired  man  from  being  a  nuisance  in  the  home, 
(3)  the  possibility  of  hiring  a   married  man  who  is  efficient, 


THE  SIZE  OF  FARMS  1 59 

and  whose  family  does  not  detract  too  much  from  the  well- 
being  of  the  neighborhood  (an  effective  man  married  to  an 
effective  woman  usually  operates  on  his  own  account  very  soon, 
and  cannot  be  had  on  the  wage  basis),  (4)  the  possibility  of  two 
single-handed  farmers  arranging  to  help  each  other  on  the 
tasks  requiring  two  men. 

Economy  in  the  utilization  of  machinery.  "  Most  of  the 
common  farm  machinery  can  be  used  to  do  the  work  on  a  200- 
or  300-acre  farm,  as  well  as  on  a  small  farm."  ^  There  is  truth 
in  this  statement  so  far  as  certain  types  of  machines  are  con- 
cerned. In  the  production  of  corn,  no  ver\'  expensive  ma- 
chinery is  used  unless  a  corn  binder  is  used.  Plows  can  be  had 
of  varying  capacity  from  one  horse  to  the  great  tractor  plows. 
In  the  production  of  small  grain,  the  binder  is  the  one  machine 
usually  owned  by  the  farmer  which  costs  over  one  hundred 
dollars,  and  in  humid  regions  and  on  rich  land,  the  acreage  to 
be  cut  by  one  machine  cannot  be  expanded  much  beyond  what 
two  men  can  put  in  without  the  risk  of  losing  a  part  of  the 
crop.  The  two  single-handed  farmers  will  find  it  profitable 
to  own  a  binder  jointly  and  work  together  in  grain  harvest. 
The  question  always  arises,  "  Will  the  greater  degree  of  utiliza- 
tion of  a  given  machine  compensate  for  the  other  disadvantages 
involved  in  increasing  the  size  of  the  farm?  " 

This  leads  to  a  discussion  of  the  unit  of  organization  on  the 
farm.  On  the  great  wheat  fields  in  California,  the  unit  may 
be  based  upon  the  combined  harvester  and  thresher.  This  ma- 
chine, the  crew  to  operate  it,  and  the  land,  men,  horses, 
and  other  equipment  required  to  raise  that  amount  of  wheat 
which  can  be  cut  during  the  normal  harvest  period,  may  here 
make  up  the  unit  of  organization.  In  the  corn  belt  of  central 
Illinois,  where  corn  is  the  principal  source  of  income,  one  man 
and  team  of  from  two  to  four  horses,  a  plow,  a  harrow,  a  corn 
planter,  a  corn  cultivator  suited  to  the  horse  power  decided 
upon,  becomes  the  basic  unit  of  organization.  This  same  unit, 
with  the  addition  of  a  grain  seeder,  a  binder,  and  a  mower,  will 
care  for  oats  and  hay  in  combined  amounts  equal  to  the  area 

'  G.  F.  Warren,  "Farm  Management,"  p.  257. 


l6o  AGRICULTURAL  ECONOMICS 

of  corn  handled.  The  area  of  corn  which  this  one  man  and 
equipment  can  prepare  the  land  for,  plant,  and  keep  clean  the 
month  after  planting,  plus  the  amount  of  land  used  for  sub- 
sidiary purposes,  becomes  the  unit  of  economical  farm  organiza- 
tion. One  or  many  of  these  units  may  make  up  a  given  farm, 
depending  upon  the  managerial  ability  of  the  farmer,  the 
conditions  in  the  household,  and  the  size  of  the  family  labor 
force.  In  the  corn  belt,  a  farm  which  will  not  employ  one  unit 
is  clearly  too  small.  To  be  of  proper  size,  the  farm  should 
make  demand  for  one,  two,  three,  or  more  of  these  units,  but 
should  not  fall  halfway  between.  A  farm  which  is  too  large  for 
one  man,  and  too  small  for  two,  cannot  be  economically  or- 
ganized for  corn  production. 

In  the  dairy  regions  where  milk  or  cream  is  the  principal 
source  of  income,  one  man  and  the  number  of  cows  he  can  milk 
and  produce  hay  and  silage  for,  becomes  the  unit  of  organiza- 
tion. While  the  unit  for  any  given  type  of  farming  varies 
greatly  in  land-using  power  from  place  to  place,  and  from  man 
to  man,  the  dairy  unit  is  an  unusually  flexible  one  on  the  family- 
farm,  because  of  the  possibility  of  using  children  and  women 
in  the  dairy. 

The  significance  of  the  unit  system  lies  in  the  fact  that  in 
general  the  increase  in  the  area  of  the  farm  cannot  go  on  by 
small  additions  of  an  acre  now  and  an  acre  then,  but  must  be 
made  in  considerable  jumps  if  the  area  is  to  conform  to  the 
demands  of  economical  farm  organization.  The  difficulty  in 
making  these  jumps  often  results  in  adjusting  the  organization 
to  the  available  area,  sometimes  with  too  high  a  degree  of  in- 
tensity of  culture,  sometimes  with  too  low  a  degree  of  intensity 
to  yield  maximum  profits.  One  method  of  adjusting  the  size 
of  a  farm  is  to  change  from  one  farm  to  another,!  and  while  this 
is  objectionable  from  the  standpoint  of  the  cost  of  moving,  it 
is  often  the  most  practical  way  of  adjusting  the  size  of  the  farm 
to  the  ability  of  the  farmer  and  his  potential  labor  force. 

The  problem  of  right  proportions  between  managerial  activity 
and  the  other  factors  of  production  is  one  of  the  most  important 
problems  related  to  the  size  of  farms.     No  rule  can  be  laid  down, 


THE  SIZE  OF  FARMS 


i6i 


but  it  is  worth  while  to  discuss  the  principles  underlying  this 
problem.  In  applying  a  given  amount  of  managerial  activity 
to  land,  equipment,  and  laborers  the  law  of  increasing  and 
diminishing  returns  must  be  considered.  If  the  managerial 
activity  is  expended  upon  too  small  a  farm,  the  profits  will  fail 
to  rise  to  the  maximum  through  lack  of  business,  and  if  the 
farm  is  too  large,  the  expenses  will  absorb  too  large  a  pro- 
portion of  the  income,  and  the  profits  will  not  be  at  the  maxi- 
mum. 

This  point  may  be  illustrated  by  means  of  the  following  table, 
in  which  the  number  of  composite  units  (a  unit  may  be  thought 
of  in  this  illustration  as  one  laborer  and  the  amount  of  capital- 
goods  and  land  which  should  be  associated  with  him)  to  be 
associated  with  one  unit  of  managerial  activity  (which  may  be 
thought  of  as  the  amount  of  such  activity  which  one  farmer 
wishes  to  devote  to  production)  is  increased  seriatim  from 
one  to  eight,  and  as  a  result  of  the  increase  in  the  number  of 
the  composite  units  brought  under  the  one  management,  the 
net  profit  per  composite  unit  is  represented  as  gradually  falling 
from  $260  to  $80,  while  the  resulting  net  profit  per  unit  of 
managerial  activity  is  represented  as  increasing  until  after  the 
fifth  composite  unit  is  added,  after  which  it  is  represented  as 
falling. 

TABLE  X 


Composite 

Total  Outlay 

Gross  Value 

Net  Profit  per 

Manager's 

Units 

OF  Product 

CoMp.  Unit 

Total  Propit 

I 

$  740 

$1000 

$260 

$260 

2 

1480 

i960 

240 

480 

3 

2220 

2880 

220 

660 

4 

2960 

3720 

190 

760 

S 

3700 

4500 

160 

800 

6 

4440 

5220 

130 

780 

7 

5180 

5880 

100 

700 

8 

5920 

6560 

80 

640 

The  figures  here  used  are  selected  more  or  less  arbitrarily 
to  illustrate  the  general  truth  that,  as  the  number  of  the  com- 


l62  AGRICULTURAL  ECONOMICS 

posite  units  brought  under  one  management  is  increased,  the 
average  return  per  composite  unit,  and  hence  the  average  net 
profit  per  composite  unit  will  fall,  but  that  for  a  time  this  fall 
in  the  net  profit  per  composite  unit  is  more  than  balanced  by 
the  increase  in  the  number  of  such  units,  and  the  net  profit  per 
unit  of  managerial  activity  continues  to  increase  until  finally 
the  point  is  reached  where  the  net  profit  per  unit  of  managerial 
activity  reaches  its  maximum,  and  if  the  number  of  composite 
units  associated  with  a  given  amount  of  managerial  activity 
be  increased  beyond  this  point,  the  net  profit  per  unit  of  the 
latter,  and  hence  the  total  net  profit  which  the  farmer  will 
be  able  to  secure  as  a  manager,  will  be  reduced  below  the  pos- 
sible maximum.  Any  conditions  which  retard  the  bringing 
about  of  this  adjustment  not  only  reduce  the  profits  of  the 
farmer,  but  increase  the  cost  of  the  nation's  food  supply. 

One  permanent  occasion  for  differences  in  the  size  of  farms  is 
the  differences  in  the  amount  of  energy  the  men  are  willing  to 
put  into  the  operation  of  a  farm. 

Having  decided  upon  the  number  of  the  composite  units  of 
the  factors  which  should  be  brought  under  a  given  amount  of 
managerial  activity,  that  is,  the  intensity  of  the  management, 
other  things  remaining  the  same,  the  size  of  the  farm  should  vary 
directly  with  the  amount  of  effort  which  the  farmer  is  wilhng 
to  put  forth  in  its  management.  The  farmer's  energy  is,  of 
course,  limited,  and  after  he  has  performed  a  given  amount  of 
work  per  day,  it  requires  more  and  more  inducement  to  impel 
him  to  increase  his  activity.  It  may  be  that  a  few  hours  of 
work  each  day  would  be  a  pleasure  to  him  and  that  the  profits 
which  he  received  from  these  few  hours'  labor  would  be  much 
more  than  enough  to  induce  him  to  perform  the  work  of  manage- 
ment ;  but  when  hour  after  hour  is  added  to  the  time  which  he 
must  spend  in  the  fields,  and  the  rapidity  of  his  movements 
from  place  to  place  must  be  increased  more  and  more,  in  order 
that  the  farm  may  be  properly  operated,  each  succeeding  addi- 
tion to  the  time  and  the  speed  of  his  work  becomes  more  and 
more  wearisome,  while  at  the  same  time  the  wants  which  are 
to  be  satisfied  by  the  fruits  of  this  increased  labor  become  less 


THE  SIZE  OF  FARMS 


163 


and  less  important  to  him,  until  finally  the  point  is  reached 
where  the  increase  in  the  net  profit  is  not  sufficient  to  induce 
the  farmer  to  increase  his  activity. 

This  can  be  illustrated  by  means  of  a  diagram.     In  Fig.  9 
the  succeeding  composite  units  of  the  agents  are  measured 


C'     D'     e'     F'     G'     !f     l'     K'     L'      M' 


E      F      G      H      I       K 

Figure  9 


M     N 


on  the  base  line  A  X,  and  the  net  profit  which  the  farmer  re- 
ceives for  managing  these  units  is  represented  by  the  area 
between  this  line  and  the  line  BY,  so  that  the  area  ABC'Cy 
for  example,  represents  the  net  return  from  one  of  the  composite 
units.  If  the  idea  of  a  composite  unit  seems  too  abstract  to 
the  reader,  he  may  think  of  one  of  these  units  of  the  agents  of 
production  as  being  one  laborer  and  the  amount  of  land  and 
equipment  associated  with  him.  That  share  of  the  net  profit 
per  unit  which  is  represented  by  the  area  lying  below  the  curved 
line  PP'  may  be  thought  of  as  the  amount  which  is  required  to 
yield  to  the  manager  a  pleasure  in  consimiption  of  goods  equal 
to  the  pain  of  performing  the  work  of  management.  Assuming 
that  he  devotes  exactly  the  same  care  to  each  unit,  as  he  con- 
tinues to  increase  the  number  of  units  the  perpendicular  dis- 
tance between  lines  AX  and  BY  will  remain  constant;  but 
a  larger  and  larger  proportion  of  the  net  profits  of  the  succeed- 
ing units  will  be  required  to  counterbalance  the  pain  or  disutihty 
accompanying  the  added  exertion  required  for  the  manage- 
ment of  such  units,  hence  the  curve  PP'  will  gradually  rise 
until  at  some  point  it  will  cross  the  Hne  BY,  beyond  which 
point  the  pain  of  exertion  exceeds  the  net  profit  to  be  secured. 

The  curve  PP',  representing  the  increase  in  the  pain  cost, 
may  start  high  up  the  line  AB  and  rise  rapidly  with  a  lazy 
man,  or  it  may  start  far  below  A,  rise  slowly  and  not  reach 


1 64  AGRICULTURAL  ECONOMICS 

line  BY  until  some  point  far  to  the  right  of  M'.  This  illus- 
trates one  of  the  causes  of  differences  in  the  capacity  of  men 
which  is  a  permanent  cause  of  differences  in  the  size  of  farms. 

From  this  point  of  view  it  becomes  obvious  that  there  can  be 
no  one  size  of  farm  which  will  pay  best  for  all  farmers,  and  hence 
the  attempt  to  draw  conclusions  from  statistical  studies  regard- 
ing the  proper  size  of  farms  sheds  Uttle  or  no  light  upon  the 
problem  of  the  individual  farmer,  however  valuable  these 
figures  may  be  for  the  study  of  geographical  and  historical  dif- 
ferences in  the  organization  of  farms. 

Which  is  the  most  desirable  from  the  social  point  of  view,  the 
large,  the  medium-sized,  or  the  small  farm?  Having  in  mind  that 
farmers  vary  greatly  in  their  degrees  of  efficiency,  it  would  seem 
socially  desirable  to  have  the  managing  done  by  the  most  effi- 
cient farmers ;  for  in  this  way  the  labor  would  be  under  more 
efficient  direction  than  where  every  man  directs  his  own  ac- 
tivities. Another  advantage  of  large  farms  lies  in  the  fact  that 
they  facilitate  a  more  extended  division  of  labor.  There  can 
be  a  shepherd  who  devotes  all  of  his  time  to  the  sheep,  and  for 
this  reason  he  can  better  understand  his  business.  So  it  is  in 
every  line  of  work  on  the  large  farm.  Machinery  can  be  used 
to  better  advantage  on  the  large  farm.  The  efficient  manager 
of  the  large  farm  can  better  determine  what  will  pay  and  what 
will  not  pay,  so  that  he  is  in  a  much  better  position  to  direct 
the  labor  power  of  society  to  the  best  advantage.  The  man 
who  is  toiling  in  the  field  as  well  as  managing  the  farm  is  less 
likely  to  be  far-sighted  at  a  time  when  he  is  tired,  and  at  such 
times  he  may  sacrifice  much  of  the  profits  for  a  relatively  small 
saving  of  labor. 

On  the  other  hand,  what  improves  the  efficiency  of  the  manage- 
ment in  this  way  may  lower  the  quality  of  the  workmanship. 
There  are  some  men,  it  is  true,  who  seem  to  work  better  for 
others  than  for  themselves,  but  with  many  others  the  opposite 
is  true.  There  are  vast  numbers  of  small  farmers  who  do  not 
use  good  methods,  who,  because  of  their  interest  in  that  which 
is  their  own,  will  put  forth  greater  effort  than  they  would  if 
they  were  working  for  some  one  else. 


THE  SIZE  OF  FARMS  165 

It  has  been  said  that  certain  kinds  of  farming  lend  themselves 
more  readily  than  others  to  large-scale  operations;  that  wheat 
farming,  for  example,  is  especially  suited  to  large-scale  opera- 
tions, but  that  as  this  one  crop  system  gives  way  to  diversified 
farming,  the  advantages  of  smaller  farms  assert  themselves. 
The  owner  of  young  stock  takes  more  pains  with  them  than  he 
would  if  he  were  a  hired  laborer.  It  is  certainly  true  as  a  general 
rule  that  the  man  who  owns  the  lambs  or  pigs  will  lose  more 
sleep  and  go  to  more  trouble  than  will  a  hired  man.  "  He 
that  is  an  hireling,  and  not  the  shepherd,  whose  own  the  sheep 
are  not,  seeth  the  wolf  coming,  and  leaveth  the  sheep,  and  fleeth : 
and  the  wolf  catcheth  them,  and  scattereth  the  sheep.  The 
hirehng  fleeth,  because  he  is  an  hirehng,  and  careth  not  for  the 
sheep." 

The  management  of  a  farm  is  something  which  must  he  dif- 
fused through  the  details  of  the  work.  There  is  a  withdrawal  of 
the  efficient  manager's  abihty  from  the  details  and  a  concentra- 
tion of  it  upon  the  general  supervision  of  the  farm  as  the  size 
of  the  farm  increases.  As  more  and  more  of  the  details  are 
delegated  to  hired  men  these  details  are  hot  looked  after  so 
well  as  they  might  be  if  looked  after  directly  by  the  master. 
Cato,  a  Roman  agricultural  writer,  says :  "  Neither  the  assi- 
duity and  experience  of  the  hired  manager,  nor  the  power  and 
willingness  of  the  master  to  lay  out  money  in  improvements, 
are  so  effectual  as  this  one  thing,  the  presence  of  the  master; 
which,  unless  it  is  frequent  with  the  operations,  it  will  happen 
to  him  as  in  an  army  when  the  general  is  absent ;  all  things  will 
be  at  a  stand."  And  again,  PKny  says:  "  The  ancients  were 
in  the  habit  of  saying  that  it  is  the  eye  of  the  master  that  does 
more  towards  fertilizing  a  field  than  anything  else." 

The  question  of  the  most  desirable  size  of  farms,  when  viewed 
from  the  standpoint  of  the  most  economic  use  of  the  productive 
energies  of  a  country,  is  a  matter  of  determining  the  point  at 
which  the  advantages  of  the  more  efficient  general  supervision 
as  to  crops,  field-systems,  intensity  of  culture,  etc.,  are  balanced 
by  losses  in  the  execution  of  the  details  of  the  work  with  less 
skill  and  personal  interest. 


1 66  AGRICULTURAL  ECONOMICS 

The  purely  economic  conclusion  is,  therefore,  that  every  man 
who  can  make  more  by  hiring  to  a  farmer  should  do  so,  and  every 
farmer  who  can  increase  his  net  profits  by  hiring  men  and  in- 
creasing the  size  of  his  farm,  without  increasing  the  amount  of 
effort  which  he  need  put  forth,  should  do  so.  Each  man  would 
then  get  the  largest  net  income,  and  the  value  of  the  farm 
products  of  the  country  would  reach  the  maximum. 

But  the  actions  of  men  are  not  controlled  entirely  by  economic 
motives.  There  is  a  pleasure  to  be  derived  from  being  one's 
own  master,  which  is  often  prized  more  highly  than  many  of 
the  things  which  money  can  buy.  As  a  result  many  men  re- 
main independent  farmers  when  they  could  secure  a  larger 
income' for  themselves  and  add  more  to  the  value  of  the  farm 
products  of  the  country  by  being  hired  men  under  the  direc- 
tion of  more  efficient  managers.  And  yet  it  may  be  that  this 
economic  loss  is  compensated  for  in  the  social  gain  that  comes 
from  self-directed  activity. 

The  proper  size  of  farms  is  a  subject  which  has  commanded 
the  attention  of  agricultural  writers  since  ancient  times.  "  The 
ancients,"  says  Pliny,  "  were  of  opinion,  that,  above  all  things, 
the  extent  of  farms  ought  to  be  kept  within  proper  bounds. 
Wherefore  it  was  a  maxim  amongst  them,  to  sow  less  and  plow 
better.  Such,  too,  I  find,  was  the  opinion  entertained  by 
Virgil,  and  indeed,  if  we  must  confess  the  truth,  it  is  the  wide- 
spread domains  that  have  been  the  ruin  of  Italy,  and  soon  will 
be  that  of  the  provinces  as  well.  .  .  .  With  that  greatness  of 
mind  which  was  so  peculiarly  his  own,  and  of  which  he  ought 
not  to  lose  the  credit,  Cneius  Pompeius  would  never  purchase 
the  lands  that  belonged  to  a  neighbor." 

Columella,  another  Roman  agricultural  writer,  also  taught 
moderation  in  the  size  of  farms.  "  To  the  other  precepts," 
says  he,  "  we  add  this,  which  one  of  the  seven  wise  men  has 
pronounced  as  a  maxim,  that  holds  true  in  all  ages,  that  there 
ought  to  be  limits  and  measures  of  things ;  and  this  ought  to  be 
understood,  as  applied  not  only  to  those  that  do  any  other 
business,  but  also  those  that  buy  land,  that  they  may  not  buy 
more  than  they  are  fully  able  for.    To  this  is  applicable  the 


THE  SIZE  OF  FARMS  1 67 

famous  sentence  of  our  poet,  You  may  admire  a  large  farm, 
but  cultivate  a  small  one;  which  ancient  precept  this  most 
learned  man  (Virgil),  .  .  .  expresses  in  verse.  This,  too, 
is  agreeable  to  an  acknowledged  maxim  of  the  Carthaginians, 
a  very  acute  nation.  That  the  land  ought  to  be  weaker  than  the 
husbandman ;  for,  when  they  struggle  together,  should  the 
former  prevail,  the  master  must  be  ruined.  And,  indeed,  there 
is  no  doubt,  that  a  small  field  well  cultivated  produces  more 
than  a  large  field  ill  cultivated."  "  Among  the  maxims  of  the 
ancients,  recorded  by  Palladius,"  says  Dickson,  "  there  is  one 
to  the  same  purpose  with  that  mentioned  by  Columella,  '  A 
small  farm  cultivated  is  more  fruitful  than  a  large  farm 
neglected.'  " 


CHAPTER  XV 
FARM  LABOR  AND  WAGES 

The  farm  labor  problem  presents  different  aspects  in  the 
different  parts  of  the  United  States.  On  the  general  farm  in 
the  northern  part  of  the  country  the  typical  wage  worker  on 
the  farm  is  a  young  man  who  is  temporarily  a  member  of  the 
farmer's  family  as  well  as  a  part  of  the  farm  crew.  He  eats 
at  the  family  table,  reads  the  paper  in  the  family  living  room 
after  supper,  puts  his  soiled  clothes  into  the  family  washing, 
and  in  general  shares  the  life  of  the  farm  home.  If  he  is  a  good 
hand  he  will  soon  become  interested  in  the  work  of  the  farm  and 
attached  to  the  farm  by  many  ties  other  than  the  wages  he 
draws.  This  young  man  is  a  part  of  the  farm  family,  and 
whether  he  is  contented  with  the  life  and  interested  in  the  work 
depends  largely  upon  the  success  of  the  farmer  and  his  wife 
in  developing  sympathetic  and  happy  relations.  There  are 
no  class  distinctions.  The  young  man  expects  to  become  an 
independent  farmer  and  feels  that  he  is  gaining  skill,  money, 
and  credit  which  will  enable  him  to  establish  a  home  of  his  own 
in  a  few  years.  His  life  and  his  motives  tend  to  make  him  a 
fine  workman  and  a  good  citizen. 

The  farm  with  a  separate  boarding  house  for  the  hired  men 
has  problems  of  its  own.  Much  of  the  personal  touch  is  lost. 
The  spirit  of  the  group  about  the  boarding  table  is  not  that  of 
a  family  group.  The  interests  of  the  farm  are  secondary  in 
the  minds  of  the  men.  The  wage  is  the  one  important  motive 
for  remaining  on  the  job.  On  the  wheat  farm,  transient  laborers 
surround  this  boarding  house  table  for  a  short  time  during  the 
harvest  period  and  are  soon  gone.  On  the  large  dairy  farm  the 
table  is  occupied  the  year  around,  but  there  is  a  constant  shift- 
ing of  men.     Men  are  going  and  new  men  are  coming  every  few 

1 68 


FARM  LABOR  AND  WAGES  169 

days.  The  life  lacks  many  of  those  finer  human  sentiments 
which  make  for  good  farm  hands  and  for  good  citizenship. 

Another  type  of  wage  worker  on  farms  is  the  married  hired 
man  who  Uves  in  a  cottage  and  works  for  the  farmer  by  the 
month  or  by  the  year.  He  is  usually  furnished  a  cottage,  a 
garden,  and  often  some  fuel,  and  a  definite  amount  of  milk 
per  day  in  addition  to  the  cash  wage  he  receives.  Another 
class  of  farm  workers  find  places  to  live  and  work  by  the  day 
or  month  for  a  farmer  who  pays  cash  wages  for  the  work  done. 
These  outside  workers  become  less  definitely  a  part  of  the  farm 
organization.  At  least  two  persons  (the  man  and  his  wife) 
and  often  others  (the  children)  have  to  be  contented  if  the 
married  workman  is  to  be  vitally  interested  in  his  work.  Un- 
less the  family  is  interested  in  the  farm,  he  is  out  of  touch  with 
the  pulse  beat  of  the  farm  when  not  at  work. 

While  the  Ufe  may  be  more  satisfactory,  the  outlook  of  the 
married  farm  hand  is  not  so  alluring  as  that  of  the  single  man. 
A  family  must  Hve  from  the  wages.  The  chance  of  saving  and 
becoming  an  independent  farmer  is  more  remote,  and  as  a 
result  many  such  famiHes  give  up  the  hope  of  climbing  the 
agricultural  ladder  round  by  round  from  wage  earner  to  tenant 
farmer,  then  to  mortgaged  owner  and  finally  to  the  free  owner  of 
a  farm.  Without  this  outlook  and  this  goal  the  farm  hand 
becomes  a  different  type  of  man,  less  to  be  desired  as  a  work- 
man and  as  a  citizen. 

In  those  parts  of  the  United  States  where  colored  and  oriental 
laborers  dominate,  the  conditions  are  very  different.  The 
colored  laborer  lives  outside  of  the  farmer's  house  in  a  cottage 
belonging  to  the  farm,  or  he  may  Hve  in  the  near-by  village  and 
go  to  the  farm  from  day  to  day.  In  the  North  the  typical 
farm  hand  is  a  neighbor's  son,  in  the  South  he  belongs  to  a  dif- 
ferent race.  This  gives  ground  for  a  difference  in  the  status  of 
the  worker  in  the  farmer's  home,  which  is  to  be  expected. 

Wages.  The  wage  of  the  farm  hand  is  a  complex  thing  not 
easily  shown  in  statistical  tables.  The  cash  wage  is  but  one 
of  the  many  considerations.  The  young  man  who  becomes  a 
part  of  the  farmer's  family  often  makes  other  matters  than  cash 


lyo  AGRICULTURAL  ECONOMICS 

wages  the  deciding  factor  in  determining  whether  he  will  take 
a  position  and  whether  he  will  hold  it  when  once  on  the  job.  If 
it  may  be  assumed  that  the  board,  the  washing,  and  the  hving 
conditions  have  continued  to  play  the  same  role  in  holding 
the  farm  hand  in  his  position  through  the  period  for  which  wage 
statistics  are  available,  it  will  appear  that  farm  wages  have 
greatly  increased  during  the  past  half  century. 

The  statistics  show  a  rise  in  the  average  monthly  cash  wage 
rate  of  men  hired  by  the  year  with  board  from  $10.09  in  1866 
to  $18.05  in  1909  and  a  range  in  wages  in  1909  from  $10.91  in 
South  Carohna  to  $37.50  in  Nevada.  When  hiring  by  the 
season  the  average  monthly  rate  with  board  ranged  from  $12.69 
in  1866  to  $20.80  in  1909 ;  without  board  the  rate  ranged  from 
$18.08  in  1866  to  $28.22  in  1909.  This  rise  in  the  average 
wage  impHes  changes  from  year  to  year  and  differences  from 
place  to  place  in  the  supply,  the  demand,  or  the  quality  of  the 
wage  workers  on  farms. 

The  wage  of  a  given  man  at  a  given  time  and  place  is  the 
result  of  a  bargain  made  by  the  employer  and  the  employee. 
The  amount  the  wage  worker  will  take  depends  upon  his  desire 
for  employment  and  the  pay  offered  in  the  various  positions 
open  to  him.  The  amount  the  employer  is  willing  to  pay  de- 
pends upon  the  use  he  has  for  the  man  and  the  number  of  men 
offering  their  services.  The  maximum  wage  is  determined 
by  the  productivity  of  labor  but  the  actual  wage  is  the  result- 
ant of  competition  among  workers  for  positions,  and  among 
employers  for  men.  Variations  in  the  wages  in  different  parts 
of  the  United  States  and  on  the  same  job  are  due  to  differences 
in  the  qualities  of  the  men,  in  the  degree  of  responsibility  placed 
upon  the  men,  the  character  of  the  work,  and  the  conditions  of 
life.  Differences  in  different  localities  may  be  due  to  differences 
in  the  relative  abundance  of  men.  It  is  probable  also  that  dif- 
ferences in  the  cost  of  living  will  have  a  considerable  influence 
upon  the  wage  rate  required  to  draw  or  hold  laborers  in  a  given 
community.  For  example,  wages  are  low  in  the  South  when 
compared  with  the  North.  This  may  be  attributed  to  several 
things.    The  quahty  of  the  labor  may  be  lower.    The  cost  of 


FARM  LABOR  AND  WAGES  171 

living  is  less,  hence  the  supply  may  multiply  on  a  lower  income 
scale  in  the  South.  In  the  western  states  wages  have  been 
relatively  high,  due  largely  to  the  relative  scarcity  when  com- 
pared with  the  East. 

In  general  the  price-fixing  forces  operate  in  much  the  same 
manner  in  determining  the  price  paid  for  labor  as  in  determin- 
ing the  price  paid  for  the  products  of  the  land.  One  differ- 
ence when  compared  with  a  staple  of  world  commerce  like 
wheat,  arises  out  of  the  fact  that  the  supply  of  laborers  does 
not  move  so  readily  from  place  to  place  to  adjust  itself  to  the 
demand  as  the  wheat  supply  does.  Any  arrangement  which 
will  provide  for  the  easy  shifting  of  labor  will  tend  to  bring 
the  wages  to  the  same  level  for  men  of  the  same  ability  in 
regions  far  from  each  other  if  the  Uving  conditions  are  the  same. 

Variations  in  wages  are  in  part  due  to  the  differences  in  the 
usefulness  of  the  employees.  These  differences  relate  to  knowl- 
edge, wisdom,  skill,  physical  strength,  interest  in  the  work, 
honesty,  and  temperament.  In  general  the  range  in  wages  is  Jar 
less  than  the  range  in  usefulness.  This  is  partly  due  ^^to  lack  of 
a  good  measure  of  the  differences,  and  partly  because  there  is 
a  variety  of  positions  to  be  filled  which  require  varying  degrees 
of  ability.  Then  again,  some  men  possess  one  quality,  some 
another  quality,  and  to  the  extent  that  each  person  finds  his 
proper  position,  he  realizes  on  his  strong  points.  One  may  have 
knowledge  but  possess  poor  judgment.  For  example,  a  man 
who  knows  something  of  the  anatomy  of  the  horse,  and  knows 
many  things  about  giving  first  aid  to  the  sick  in  the  horse  barn 
and  in  the  dairy,  once  seriously  proposed  hitching  to  a  mowing 
machine  a  1400-pound  three-year-old  colt  which  had  never 
had  a  bridle  on  before.  Another  example  is  that  of  a  man 
who  possessed  heavy  muscles  but  who  used  poor  judgment  in 
deciding  how  much  muscle  to  use  on  a  given  occasion.  As  a 
result  fork  handles  were  continually  broken,  bolts  were  twisted 
off,  and  the  cows'  udders  suffered  from  the  excessive  applica- 
tion of  muscle  in  milking.  Again  a  man  may  possess  good 
qualities  but  be  a  grouch.  He  may  hate  nearly  every  one  he 
comes  in  contact  with  and  be  kept  on  the  job,  at  ordinary 


172  AGRICULTURAL  ECONOMICS 

wages,  only  because  he  does  a  lot  of  work,  but  being  denied 
the  high  position  his  other  qualities  would  have  justified, 
because  of  this  lack  of  self-control  and  kindly  attitude  toward 
other  people.  On  the  other  hand,  a  young  man  who  at  first  was 
so  ignorant  of  farming  that  he  walked  through  the  hay  up  to  a 
mowing  machine  in  motion  and  into  the  cutter-bar,  to  his 
sorrow,  and  who  was  continually  making  mistakes  which  cost 
the  farmer  money,  held  a  position,  drew  the  going  wage,  and 
in  a  few  years  worked  his  wa}^  to  a  head  position  on  a  good 
farm  which  he  filled  admirably.  This  was  made  possible  be- 
cause of  the  fine  spirit  he  always  showed.  He  was  a  master 
at  being  kind,  he  was  industrious,  and  he  took  great  interest 
in  the  work  of  the  farm.  These  qualities  win  the  farmer  and 
he  will  pay  full  wages  and  be  patient  if  he  likes  the  man  and  feels 
that  he  is  improving  in  his  work. 

The  number  of  wage  workers  on  farms  in  the  United  States 
increased  from  3,004,061  in  i8go,  to  4,410,877  in  1900,  to 
5,975,057  in  1910.  The  number  of  farms  increased  also  but  at 
a  less  rapid  rate.  In  1890  there  were,  in  addition  to  the  farmers 
themselves,  66  workers  or  farm  laborers  for  every  hundred 
farms.     In  1900  there  were  77,  and  in  1910  there  were  94. 

While  this  was  a  period  of  increase  in  the  labor  supply  per 
farm,  it  was  also  a  period  when  new  types  of  labor-saving  ma- 
chinery were  coming  into  use.  The  gang  plow  was  much  more 
widely  used  at  the  end  than  at  the  beginning  of  this  period. 
The  two-row  corn  cultivator  also  tended  to  reduce  the  demand 
for  laborers,  and  a  wider  harrow  was  drawn  by  the  multiple 
teams  used  on  the  gang  plow. 

Yet  in  spite  of  this  increase  in  the  supply  of  labor  and  the  use 
of  labor-saving  machinery,  there  was  apparently  a  relative 
shortage  of  labor  as  manifested  by  the  talk  about  the  scarcity 
of  labor  and  the  actual  rise  in  wages.  Either  the  farmers  them- 
selves worked  less  (which  might  be  their  desire  as  good  prices 
made  them  prosperous)  or  there  was  more  work  per  farm. 
This  might  arise  from  an  increase  in  the  size  of  farms  or  from  a 
more  intensive  use  of  the  land.  The  fact  is,  the  average  size 
of  farms  in  the  United  States  fell  from  146.2  acres  in  1900  to 


FARM  LABOR  AND  WAGES  173 

138. 1  in  1910.  But  the  average  improved  acres  increased 
from  72.2  to  75.2  per  farm.  This  implies  a  more  complete 
utiHzation  of  the  farm.  The  total  number  of  acres  of  land  per 
person  engaged  in  agriculture  was  about  81  in  1900  and  about 
70  in  1910.  Thus,  in  spite  of  the  fact  that  the  investment  in 
farm  implements  and  machinery  increased  from  about  90  cents 
per  acre  to  $1.44  per  acre,  each  person  engaged  in  agriculture 
operated  on  the  average  13.5  fewer  acres.  This  means  more 
intensive  utilization  of  the  land  or  less  work  per  man.  More 
work  may  take  the  form  of  milking  cows.  In  Wisconsin  and 
Minnesota  where  dairying  was  on  the  increase,  the  acreage  per 
man  decreased.  In  Nebraska  and  Kansas  there  was  an  in- 
crease in  the  number  of  acres  per  man.  In  Indiana,  Illinois, 
Michigan,  and  North  Dakota,  the  ratio  changed  but  little. 
In  these  grain  states  new  types  of  machinery  would  tend  to 
have  this  effect.  That  is,  the  more  intensive  farming  was 
accomplished  by  means  of  more  equipment  instead  of  more 
labor. 

The  demand  for  labor  is  not  an  absolute  thing.  In  fact  it 
is  quite  flexible.  The  farmer  can  make  use  of  more  or  less  labor 
depending  upon  the  cost  of  that  labor.  The  farmer  can  operate 
his  farm  so  as  to  use  much  or  little  labor.  He  can  plow  his  land 
or  graze  it ;  he  can  feed  his  grain  to  cattle  or  he  can  sell  it ;  he 
can  keep  steers  and  hogs  or  he  can  keep  milch  cows.  Which 
he  should  do  depends  upon  which  pays  best  with  a  given  wage 
scale.  The  higher  the  wage  the  greater  the  inclination  to  get 
along  with  less  help  and  to  choose  a  type  of  farming  which 
makes  one  free  from  the  hired  man. 

Many  farmers  who  own  farms  and  are  so  well-to-do  as  to 
desire  to  hire  all  the  work  done  on  their  farms,  avoid  the  whole 
farm  labor  problem  by  moving  oS  the  farm  and  putting,  as 
share  tenant  on  the  farm,  a  younger  man  who  expects  to  work 
hard  and  who  has  a  family  willing  to  help  with  the  farm  work. 
The  farmer  who  stays  with  the  farm  and  faces  the  farm  labor 
question  finds  that  his  reward  is  little  greater  than  that  of  his 
neighbor  who  turns  over  to  a  tenant  the  problem  of  getting  the 
work  done. 


174  AGRICULTURAL  ECONOMICS 

The  man  who  faces  the  farm  labor  problem  and  who  must 
solve  it  for  his  own  farm  finds  that  custom  and  sentiment  must 
be  used  for  all  they  will  bring  if  he  is  to  succeed.  Custom  does 
much  to  determine  a  wage  rate  which  had  as  well  be  adhered 
to.  Sentiment  determines  how  difficult  or  how  easy  it  is  to 
secure  and  keep  laborers  at  the  customary  wage. 

One  of  the  real  problems  is  finding  the  right  man  for  the  given 
farm.  Just  as  custom  and  sentiment  have  much  to  do  in 
determining  the  wages  the  farmer  must  pay  if  he  decides  to 
keep  help  and  leaves  him  entirely  free  to  hire  or  not  as  he 
pleases,  so  also  do  these  same  factors  tend  to  retard  the  move- 
ment of  surplus  labor  from  one  place  to  another.  But  a  still 
more  important  hindrance  to  the  movement  of  laborers  is  the 
lack  of  knowledge  of  the  opportunities  available  for  the  workers 
who  are  in  the  region  of  relative  oversupply  and  who  could 
do  much  better  for  themselves  and  serve  a  more  important 
purpose  in  another  region.  Lack  of  knowledge  of  the  exist- 
ence of  these  men  on  the  part  of  would-be  employers,  and  when 
they  are  heard  of,  lack  of  knowledge  of  the  ability  and  char- 
acter of  these  employees,  make  the  calls  few  for  movements  of 
labor  excepting  in  outstanding  cases  like  the  annual  movement 
of  transients  to  the  wheat  fields  in  harvest  time.  Another  retard- 
ing force  is  the  cost  of  the  trip,  though  in  many  instances  the  dis- 
tance is  not  great  if  there  were  a  means  of  knowing  where  to  go. 

There  is  real  need  of  a  network  of  farm  labor  bureaus  which 
will  provide  for  the  information  as  to  the  character  and  loca- 
tion of  positions  open  and  the  qualities  and  locations  of  men 
available  to  fill  the  positions.  A  system  of  this  kind  would 
go  far  toward  stimulating  better  farming  for  the  reason  that 
many  a  farmer  now  continues  to  tolerate  inefficiency  on  the 
part  of  hired  men  who,  if  they  were  in  danger  of  being  dropped, 
would  do  very  much  better  work.  If  a  bureau  were  at  hand 
there  would  probably  be  more  shifting  of  laborers  for  a  time 
at  least,  but  the  result  would  be  a  better  fitting  of  men  to  jobs, 
a  greater  productivity,  better  wages,  and  larger  profits. 

There  are  various  methods  of  paying  labor.  The  wage 
agreed  upon  may  be  for  a  year,  a  season,  a  month,  a  week,  a 


FARM  LABOR  AND  WAGES  1 75 

day,  an  hour,  or  by  the  piece.  Any  of  these  may  be  sup- 
plemented by  bonuses,  profit  sharing,  or  by  the  sliding  wage 
scale.  The  payment  may  be  all  in  cash,  but  usually  part  in 
cash  and  part  in  kind. 

The  most  common  method  of  hiring  labor  in  the  general  and 
dairy  farming  districts  is  to  pay  a  definite  wage  per  month 
v\ith  an  agreement  extending  for  a  season  or  for  a  year.  In 
many  instances  the  wage  rate  is  different  for  the  different 
months  of  the  year.  For  example,  forty  dollars  per  month  and 
board  for  the  eight  months  from  April  to  November,  inclusive, 
and  twenty-five  dollars  per  month  and  board  for  the  four  months 
from  December  i  to  March  31  has  been  noted.  The  funda- 
mental character  of  this  agreement  is  not  very  different  from 
an  agreement  upon  a  wage  by  the  month  without  any  agree- 
ment as  to  the  term  of  months  the  arrangement  is  to  con- 
tinue. In  most  instances  the  relation  is  brought  to  a  close  as 
soon  as  both  parties  are  dissatisfied,  even  if  there  has  been  an 
agreement  for  an  extended  period  of  time. 

Harvest  workers  and  transient  laborers  usually  work  for  a 
definite  wage  per  day  when  employed  and  board  while  at  work 
and  while  lying  over  because  of  weather  conditions  which  stop 
the  work. 

In  England  the  common  method  is  to  pay  wages  by  the  week 
and  to  settle  every  Saturday  night.  It  is  often  the  custom  to 
supplement  this  regular  wage  by  a  bonus  at  the  end  of  harvest 
if  all  have  done  well.  In  some  instances  a  lump  sum  is  paid 
to  the  crew  for  putting  up  the  harvest.  Under  this  plan  each 
worker  gets  his  proportion  of  the  lump  sum  instead  of  the  weekly 
wage.  This  is  a  higher  wage  and  is  intended  to  stimulate  more 
strenuous  effort  in  the  harvest  field. 

Profit  sharing  may  take  the  form  of  a  percentage  of  the  net 
proceeds  of  the  year's  business.  This  is  not  very  satisfactory 
because  it  is  very  difficult  to  arrive  at  an  accurate  statement  of 
the  profits  of  a  given  year.  Crop  sharing  or  sharing  the  gross 
proceeds,  which  becomes  a  form  of  tenancy,  is  the  most  satis- 
factory arrangement  if  the  profits  are  to  be  divided. 

The  bonus  has  its  advantages.    For  example,  if  each  work- 


176  AGRICULTURAL  ECONOMICS 

man  in  a  dairy  is  to  receive  an  extra  wage  if  the  bacteria  count 
is  kept  below  a  certain  number  throughout  the  month,  the 
bonus  may  prove  helpful.  The  bonus  may  be  used  as  an  un- 
promised  reward  of  industry  and  ability.  When  wisely  ad- 
ministered this  has  a  wholesome  effect  upon  the  organization. 

The  piece-work  wage  is  used  on  the  farm  in  getting  special 
jobs  done.  Corn  is  often  husked  for  so  much  per  bushel ; 
plowing  is  done  by  the  acre ;  threshing  is  paid  for  by  the  bushel ; 
silos  are  filled  for  so  much  per  foot,  depending  on  the  size; 
ditch  digging  is  paid  for  by  the  rod ;  and  berries  are  picked  by 
the  box.  Many  other  examples  of  piece  work  will  be  noted 
by  the  observing  student. 

Piece  work  is  advantageous  in  that  it  stimulates  strenuous 
activity  at  a  time  when  there  is  an  unusual  amount  of  work  to 
do.  It  results  in  a  greater  justice  in  the  payment  of  wages 
than  is  secured  from  a  standard  daily  wage,  for  each  is  paid 
according  to  the  work  he  has  accomplished.  The  rate  of  pay 
is  usually  much  higher  than  the  standard  wage  and  is  used  in 
agriculture  to  draw  an  extra  supply  of  labor  for  a  short  time 
as  well  as  to  speed  up  the  work. 

The  main  difficulty  in  the  piece-work  system  arises  out  of 
the  danger  that  the  quality  of  the  work  will  suffer.  For  ex- 
ample, in  husking  corn  by  the  bushel  there  is  danger  that  the 
unscrupulous  workman  will  take  the  large  ears  and  leave  the 
smaller  and  less  accessible  ears  in  the  field.  In  this  way  the 
workman  may  damage  his  employer  more  than  the  work 
done  is  worth.  To  be  a  success  the  work  done  under 
the  piece-work  wage  system  must  be  subject  to  inspection  in 
order  that  the  quality  of  the  work  may  not  be  slighted. 

The  goal  of  the  hired  man  is  the  position  of  an  independent 
farmer  on  a  farm  of  his  own.  The  possibility  of  attaining  this 
goal  depends  upon  many  things,  all  of  which  center  about  the 
opportunity  to  learn  how  to  farm  for  profit  and  the  opportunity 
and  the  incUnation  to  save  his  wages.  The  young  man  who 
receives  a  moderate  wage  and  works  for  a  successful  farmer  who 
himself  is  climbing  the  agricultural  ladder  and  is  in  the  process 
of  paying  for  his  farm,  is  more  likely  to  succeed  than  the  young 


FARM  LABOR  AND  WAGES  177 

man  who  receives  a  high  wage  for  working  on  a  farm  owned  by 
a  wealthy  man  who  is  farming  for  show  rather  than  for  profit. 
The  latter  position  teaches  the  wrong  kind  of  farming  methods 
and  the  wrong  kind  of  spending  habits  for  one  who  expects  to 
save  from  his  wages,  become  a  successful  farmer,  and  later 
buy  a  farm.  The  wise  young  man  will  give  due  consideration 
to  the  environment  as  well  as  the  wage  which  the  position  offers, 
for  wisdom,  skill,  good  habits,  and  credit  go  farther  than  money 
in  starting  one  on  the  safe  road  to  success  as  a  farmer. 


CHAPTER  XVI 
FARM   CREDIT  AND  THE  RATE   OF  INTEREST 

In  the  discussion  of  the  organization  of  production  in  the 
previous  chapters,  it  has  been  assumed  that  the  farmer  is  in  a 
position  to  command  the  instruments  of  production  in  quanti- 
ties suited  to  his  ability  and  to  the  type  of  farming  he  is  under- 
taking. It  is  a  well-recognized  fact  that  many  farmers  do  not 
possess  wealth  enough  to  own  the  land  and  equipments  needed. 

Farm  credit  is  essential  to  good  agriculture.  If  each  farmer 
were  limited  to  the  equipment  and  the  land  he  could  buy  and 
pay  for,  some  farmers  would  be  wasting  their  energies  working 
with  too  little  land  or  inadequate  equipments,  while  others 
would  be  trying  to  operate  more  than  they  could  use  to  advantage 
and  be  "  land  poor."  A  good  credit  system  is  one  which  will 
facilitate  the  adjustments  between  those  who  have  more  than 
they  can  operate  to  advantage  and  those  who  can  profit  by 
operating  more  with  a  view  to  maximum  economy.  Such  a 
credit  system  increases  the  incomes  of  both  parties  and  increases 
the  productivity  of  the  country  as  a  whole,  hence  a  good  farm 
credit  system  is  a  matter  of  importance  to  all  consumers  as 
well  as  to  many  producers  of  farm  products. 

The  hanks  of  this  country  are  organized  primarily  to  take 
care  of  the  merchants  and  manufacturers.  These  classes  of 
business  men  have  a  rapid  turnover  in  their  business  and  re- 
quire large  sums  of  money  for  short  periods.  The  farmer's 
turnover  is  not  so  rapid.  He  invests  in  Hve  stock,  machinery, 
buildings,  and  land,  all  of  which  are  essential  to  the  success  of 
his  business,  but  he  does  not  sell  them  in  ninety  days  and  put 
the  proceeds  back  in  the  bank  for  a  few  days  and  then  borrow  it 
again  for  another  transaction.  The  farmer  continues  to  use 
the  same  land  and  equipments  for  a  series  of  years,  and  if 

178 


FARM  CREDIT  AND  THE  RATE  OF  INTEREST       179 

the  banker  had  a  way  of  viewing  this  investment  and  testing 
its  worth  from  time  to  time,  he  would  be  better  off  lending  the 
funds  to  farmers  on  long-time  loans  than  lending  to  business 
men  on  short-time  loans.  As  it  is  now  commonly  operated, 
the  bank  is  too  rarely  a  farmers'  credit  institution. 

With  the  growth  of  banks  owned  and  controlled  by  farmers 
and  with  the  work  of  a  few  prominent  men  in  educating  the 
bankers  to  the  needs  of  the  farmers,  the  situation  is  improving. 
It  is  hoped  that  one  effect  of  the  federal  reserve  system  will  be 
the  possibility  of  more  rediscounting  on  the  part  of  banks  in- 
stead of  such  frequent  repayment  on  the  part  of  the  borrower. 

The  period  of  the  loan  should  correspond  to  the  farmer's 
turnover,  or,  if  the  property  is  not  turned  over  in  the  regular 
order  of  affairs  but  held  continually,  then  the  term  should  be 
such  as  will  enable  the  farmer  to  gradually  pay  the  debt  out  of 
his  earnings.  The  merchants'  bank  is  not  organized  for  this 
latter  function  and  cannot  be  depended  upon.  Some  form  of 
land  credit  institution  is  needed  for  this  purpose. 

While  the  bankers  of  some  parts  of  the  United  States  are 
meeting  the  farmers'  needs  for  short  loans,  there  are  other 
locaHties  where  this  need  is  not  being  so  well  cared  for.  This 
is  more  particularly  true  of  the  South,  where  farmers  quite 
frequently  ask  for  advances  on  which  to  live  while  making  a 
crop.  It  often  happens  that  the  banker  is  unwilling  to  lend 
directly  to  the  farmer,  but  lends  to  the  merchant,  who  makes 
advances  to  the  farmer,  often  on  ruinous  terms.  The  bankers 
are  not  solely  responsible  for  this  situation,  as  has  been  proved 
by  an  experiment  at  Red  Springs,  Texas,  located  in  a  county 
where  it  was  said  bankers  do  not  lend  money  to  farmers.  At 
Red  Springs  a  cooperative  credit  association  was  organized  in 
which  the  farmers  of  a  neighborhood  combined  their  resources 
as  a  basis  of  credit  and  borrowed  money  in  $1000  lots  and  lent 
it  out  among  their  members  in  smaller  amounts  as  needed. 
At  first  the  bankers  wanted  nothing  to  do  with  this  credit 
association,  but  after  a  year's  successful  operation  the  banks 
of  the  county  seat  were  ready  to  advance  the  money  needed 
by  the  association.    This  is  a  commendable  move  on  the  part 


l8o  AGRICULTURAL  ECONOMICS 

of  the  farmers  and  illustrates  what  is  often  needed  in  order  to 
make  farmers  desirable  bank  patrons.  The  group  of  farmers 
organized  into  an  association  may  be  looked  upon  as  a  banking 
auxiliary  or  as  a  farmers'  borrowing  organization.  There  is 
work  for  both  the  farmer  and  the  banker  in  developing  a  better 
credit  system. 

The  trust  company  deals  in  a  class  of  long-time  loans  of  which 
the  farm  mortgage  is  the  typical  example  as  far  as  they  have 
to  do  with  farming  interests.  Banks  are  much  less  attracted 
by  farm  mortgages.  Banks  and  trust  companies  are  probably 
of  much  less  importance  in  the  making  of  loans  to  farmers  for 
the  purpose  of  buying  land  than  are  the  well-to-do  farmers 
and  the  retired  farmers  of  a  prosperous  neighborhood.  These 
men  know  land  values  and  know  the  borrowers  both  with  re- 
spect to  their  character  and  their  abilities  as  farmers.  For  this 
reason  they  are  in  a  strong  position  to  make  loans  with  safety 
and  at  no  expense  for  investigations,  whereas  the  bank  or  trust 
company  would  find  it  necessary  to  be  at  considerable  expense 
in  ascertaining  the  merits  of  each  particular  case. 

Many  of  these  country  money  lenders  are  fine  citizens  and 
leaders  for  a  better  country  life  who  take  pleasure  in  seeing  the 
young  farmer  climb  the  agricultural  ladder  to  the  position  of 
financial  independence.  On  the  other  hand,  some  of  them  are 
selfish,  close-fisted  men  who  enjoy  making  foreclosures.  In 
general  a  more  systematic  and  standardized  system  of  money 
lending  to  farmers  on  mortgages  is  desirable. 

The  agents  for  insurance  companies  make  great  numbers  of 
loans  on  farm  mortgages.  These  agents  are  usually  men  who 
know  the  local  situation  thoroughly  and  who  receive  a  com- 
mission from  the  company  for  placing  loans.  The  insurance 
company  is  in  no  hurry  for  its  money,  hence  it  prefers  long-time 
loans.  Neither  does  it  want  land,  hence  it  is  not  anxious  to 
make  foreclosures.  On  the  other  hand,  the  insurance  company 
does  not  care  to  receive  partial  payments  from  time  to  time  and 
hence  the  farmer  may  have  to  accumulate  his  savings  and  hold 
them  without  interest  or  receiving  a  low  rate  of  interest  while 
he  continues  to  pay  the  higher  rate  for  the  money  he  has  bor- 


FARM   CREDIT  AND  THE  RATE  OF  INTEREST       l8l 

rowed.  What  is  needed  is  an  institution  which  will  lend  money 
at  reasonable  rates  and  provide  for  a  flexible  system  of  partial 
payments. 

Neither  the  local  money  lender  nor  the  agent  of  the  insurance 
company  provides  farmers  with  a  means  of  investing  their  sav- 
ings. The  young  farmer  who  saves  but  a  few  hundred  dollars 
each  year  cannot  hope  to  lend  this  money  on  a  mortgage, 
because  those  who  wish  to  borrow  money  to  invest  in  land 
generally  desire  a  larger  sum  at  one  time.  Hence  the  farmer 
finds  the  country  bank  with  its  low  rate  of  interest  about  the 
only  chance  for  investing  his  savings  during  the  years  he  is 
trying  to  accumulate  enough  capital  to  enable  him  to  invest  in 
land.  When  the  time  has  come  for  him  to  make  an  invest- 
ment by  paying  half  of  the  value  of  a  piece  of  land  from  the 
savings  of  many  years,  he  is  embarrassed  by  the  fact  that  while 
he  has  been  able  to  get  no  more  than  four  per  cent  for  the  use 
of  his  money,  he  must  pay  six  per  cent  for  the  money  which  he 
wishes  to  borrow.  This  should  certainly  be  enough  to  convince 
the  farmer  that  something  is  wrong.  The  important  question 
is,  Can  anything  be  done  to  remedy  this  condition  of  affairs  ? 

Something  has  been  done  in  other  countries,  and  something 
is  being  done  in  this  country  to  give  the  farmer  a  better  credit 
system.  More  than  a  hundred  years  ago  institutions  were 
established  in  Germany  for  the  purpose  of  lending  money  to 
the  farmers  at  a  low  rate  of  interest ;  and  the  years  have  proved 
the  wisdom  of  this  course  of  action.  The  most  important 
institutions  for  making  loans  to  farmers,  in  Germany,  are  the 
district  cooperative  credit  associations  (Landschaften),  which 
are  pubUc  or  semipublic  institutions  for  the  purpose  of  lending 
money  on  mortgages.  These  are  organizations  of  landowners, 
who  by  combining  their  resources  into  an  unlimited  company 
are  able  to  borrow  money  at  a  very  low  rate,  —  at  a  rate  com- 
parable to  that  for  which  the  government  can  float  its  bonds. 
As  the  institution  is  not  intended  for  profit,  the  loans  are  made 
to  landowners  at  a  rate  just  enough  higher  than  that  paid  by 
the  institution  to  cover  the  costs  of  carrying  on  the  business. 
Money  is  lent  on  mortgages  to  the  farmers  and  in  order  to 


1 82  AGRICULTURAL  ECONOMICS 

raise  the  money  for  such  loans,  the  institution  is  permitted  by 
pubHc  authority  to  issue  mortgage  bonds  to  the  value  of  the 
mortgages  it  holds.  As  all  the  members  of  the  association  are 
jointly  and  severally  liable  to  the  full  value  of  their  lands,  the 
bonds  are  considered  excellent  investments,  and  are  floated  at 
a  low  rate  of  interest. 

When  the  money  has  been  lent  to  a  farmer  by  one  of  these 
institutions  and  a  mortgage  given  to  secure  the  loan,  it  is  the 
regular  thing  to  collect  a  small  amount  as  a  partial  payment 
each  year  until  the  whole  amount  is  paid.  If,  for  example, 
the  rate  of  interest  charged  by  the  institution  is  four  per  cent, 
five  per  cent  will  be  collected  each  year.  Four  per  cent  is 
interest  and  the  one  per  cent  is  a  partial  payment  which  ac- 
cumulates with  interest  until  at  the  end  of  a  little  over  forty 
years  sufficient  has  been  paid  in  to  cancel  the  debt.  It  is  also 
possible  for  the  more  thrifty  farmers  to  make  other  payments 
which  shorten  the  period  required  for  canceling  the  debt.  In 
some  cases,  these  additional  partial  payments  must  be  paid 
in  mortgage  bonds,  which  can  be  bought  at  the  market  price. 
">'  These  mortgage  bonds  make  a  safe  and  ready  means  of 
investing  the  farmers'  savings.  In  them  the  farmer  finds  a 
safe  investment  which  is  as  permanent  as  he  may  desire  to  have 
it,  and  at  the  same  time  an  investment  on  which  he  can  reahze 
at  any  time  in  case  he  decides  to  invest  in  land.  The  German 
form  of  the  institution  may  not  exactly  meet  our  needs,  but  it 
is  certainly  true  that  the  principle  of  association  is  especially 
desirable  in  any  system  of  land  credit. 

Not  only  do  such  institutions  make  it  possible  for  the  young 
farmers  to  invest  their  savings  until  they  are  ready  to  buy,  and 
then  to  borrow  money  to  finish  paying  for  the  land,  but  they 
make  it  more  desirable  for  the  retiring  farmers  to  sell  their  land, 
as  they  can  invest  in  bonds  which  are  as  safe  as  the  investment 
in  land  and  pay  practically  the  same  returns.  Thus  it  is  that 
a  good  credit  system  is  the  best  means  of  keeping  the  tenant 
problem  from  becoming  acute. 

The  safety  of  these  institutions  is  insured  by  the  fact  that 
they  are  district  associations.     Each  institution  operates  only 


FARM   CREDIT  AND  THE  RATE  OF  INTEREST       183 

within  a  very  limited  and  well-defined  field,  so  that  the  ofl5cials 
are  able  to  know  the  men  and  the  land  values  throughout  the 
district. 

The  effect  of  this  credit  system  is  shown  by  the  fact  that,  in 
1895,  only  16.42  per  cent  of  the  farms  in  Germany  were  com- 
posed entirely  of  leased  land;  and  only  12.38  per  cent  of  all 
the  land  included  in  farms  was  leased  land.  Indeed,  Germany 
is  a  nation  of  landowning  farmers,  while  in  France  47.2  per 
cent  of  the  cultivated  area  is  occupied  by  tenants,  and  in  Eng- 
land the  landowning  farmer  is  the  exception.  Practically  all 
the  land  of  England  is  farmed  by  tenant  farmers  or  hired 
managers. 

In  the  last  few  years  much  has  been  done  to  bring  about  the 
estabHshment  of  a  better  farm  credit  system  in  the  United 
States.  This  has  resulted  in  the  Federal  Farm  Loan  Act  of 
1915,  which  provides  for  the  establishment  of  Federal  Land 
Banks  which  have  for  their  purpose  the  lending  of  money  to 
farmers  at  a  low  rate  of  interest  on  mortgage  security. 

The  Federal  Farm  Loan  Act  provides  for  the  division  of  the 
United  States  into  twelve  districts  and  the  establishment  of  one 
Federal  Land  Bank  in  each  district.  The  farmers  normally 
come  in  touch  with  the  land  banks  through  the  National  Farm 
Loan  Association.  This  association  is  a  local  institution  made 
up  of  ten  or  more  farmers  of  a  given  district  who  wish  to  borrow 
money  on  farm  mortgages.  Loans  are  limited  to  $10,000  for 
each  person.  For  each  hundred  dollars  borrowed,  the  borrower 
must  subscribe  for  one  five-dollar  share  of  stock  in  the  associa- 
tion. This  limits  the  actual  amount  one  man  can  secure  for 
farm  purposes  to  $9500.  The  amount  of  the  loan  is  Umited, 
also,  to  50  per  cent  of  the  value  of  the  land  plus  20  per  cent  of 
the  value  of  the  buildings.  The  farm  loan  associations  indorse 
the  mortgages  and  turn  them  over  to  the  Federal  Land  Bank 
of  the  district  as  security  for  the  funds  borrowed  from  that  insti- 
tution. In  turn  the  Land  Bank  issues  bonds  which  are  sold  to 
raise  the  money  which  is  lent  to  the  association  and  in  turn  lent 
to  the  farmer.  It  is  stipulated  in  the  law  that  every  mortgage 
"  shall  contain  an  agreement  providing  for  the  payment  of  the 


l84  AGRICULTURAL  ECONOMICS 

loan  on  an  amortization  plan  by  means  of  a  fixed  number  of 
annual  or  semiannual  installments  sufficient  to  cover,  first, 
a  charge  on  the  loan,  at  a  rate  not  to  exceed  the  interest  rate  in 
the  last  series  of  farm  loan  bonds  issued  by  the  land  bank 
making  the  loan ;  second,  a  charge  for  administration  and  profits 
at  a  rate  not  exceeding  one  per  centum  per  annum  on  the  unpaid 
principal,  said  two  rates  combined  constituting  the  interest 
rate  on  the  mortgage ;  and,  third,  such  amounts  to  be  applied 
on  the  principal  as  will  extinguish  the  debt  within  an  agreed 
period,  not  less  than  five  years  nor  more  than  forty  years: 
Provided,  that  after  five  years  from  the  date  upon  which  a  loan 
is  made  additional  payments  in  sums  of  $25  or  any  multiple 
thereof  for  the  reduction  of  the  principal,  or  the  payment  of  the 
entire  principal,  may  be  made  on  any  regular  installment  date 
under  the  rules  and  regulations  of  the  Federal  Farm  Loan 
Board.  .  .  .  No  loan  on  mortgage  shall  be  made  under  this 
Act  at  a  rate  of  interest  exceeding  six  per  centum  per  annum, 
exclusive  of  amortization  payments." 

The  efect  of  a  good  credit  system  is  to  encourage  landowner- 
ship  on  the  part  of  farmers.  Much  has  been  said  of  the  in- 
spiration which  ownership  of  land  gives  to  the  farmer  which 
leads  to  better  farming  and  better  citizenship.  Much  might 
be  said  of  the  greater  joy  of  life  on  the  owned  farm  where  the 
home  can  be  beautified  with  assurance  that  the  worker  may 
reap  the  reward  of  his  efforts. 

On  the  other  hand,  better  credit  usually  means  greater  in- 
debtedness. In  a  period  of  rising  prices  when  the  value  of  the 
farm  is  rising  while  the  debt  is  being  paid  with  money  which 
is  ever  more  easily  secured,  indebtedness  has  few  horrors.  But 
in  a  period  of  falling  prices  when  the  value  of  the  land  falls  as 
rapidly  as  the  debt  is  paid,  and  when  the  dollars  are  ever  harder 
to  get,  the  joy  of  ownership  becomes  entirely  overshadowed  by 
the  fear  of  foreclosure.  To  insure  that  a  credit  system  shall 
be  a  blessing  it  may  be  desirable  to  introduce  some  plan  which 
will  stabilize  the  purchasing  power  of  the  dollar. 

Another  bad  effect  which  has  been  claimed  against  the  credit 
system  which  lowers  the  interest  rate  is  that  it  increases  the 


FARM  CREDIT  AND  THE  RATE  OF  INTEREST       185 

value  of  the  land  and  in  this  way  makes  it  necessary  for  the 
prospective  buyer  to  pay  the  same  amount  of  interest  and  a 
larger  principal.  The  effect  of  better  credit,  in  this  regard, 
depends  upon  the  source  of  the  funds.  If,  for  example,  the 
federal  farm  loan  bonds  are  sold  in  New  York  City  and  the 
money  borrowed  by  Iowa  farmers,  the  effect  might  be  to  force 
the  price  of  land  up.  On  the  other  hand,  if  the  bonds  were 
marketed  in  the  same  region  where  the  money  is  borrowed, 
the  effect  might  be  very  different.  Many  farmers  in  Iowa  buy 
more  land  than  they  care  to  farm  because  they  have  no  other 
safe  investment  available.  When  federal  farm  loan  bonds  can 
be  bought  at  the  country  banks  in  Iowa  many  farmers  who  are 
now  paying  high  prices  for  land  just  as  a  safe  investment  and 
many  retired  farmers  who  hesitate  to  sell  their  farms  for  lack 
of  a  safe  investment  will  prefer  bonds  to  land.  The  result  will 
be  that  many  of  the  strongest  bidders  for  land  will  cease  to  buy 
and  many  holders  of  land  will  decide  to  sell.  This  will  tend  to 
increase  the  number  of  farms  for  sale  and  decrease  the  demand 
from  one  class  of  buyers  at  the  time  when  an  increasing  number 
of  young  farmers  are  buying  because  of  the  better  credit  system. 
What  the  result  of  these  varied  forces  will  be  is  hard  to  predict, 
but  where  the  whole  system  is  handled  in  a  satisfactory  manner 
both  landlord  and  tenant  may  be  benefited  by  encouraging 
ownership  in  place  of  tenancy. 

Interest  is  paid  for  the  use  of  borrowed  money.  This  money 
may  be  borrowed  to  invest  in  land  or  equipments,  to  pay  labor, 
or  to  buy  the  necessities  of  life.  In  ancient  times  money  was 
borrowed  primarily  to  buy  subsistence.  At  that  time  the 
charging  of  interest  was  looked  upon  as  wrong,  just  as  we  would 
look  upon  it  as  wrong  for  a  farmer  to  refuse  to  lend  his  ax  for 
half  a  day  free  of  charge  to  the  son  of  a  poor  widow,  in  order 
that  he  may  cut  some  stovewood  for  his  mother.  The  charging 
of  any  interest  was  once  called  usury.  Now  only  the  charging 
of  an  excessive  rate  is  called  usury.  This  change  of  attitude 
is  due  to  the  fact  that  in  modern  life  loans  are  usually  made 
for  productive  purposes. 
While  interest  is  nominally  paid  for  the  use  of  money,  it  is 


1 86  AGRICULTURAL  ECONOMICS 

the  equipments  the  farmer  buys  with  the  money  he  is  really 
securing  the  use  of.  It  is  the  equipment  which  is  productive. 
That  is,  the  farmer  working  with  teams,  tools,  and  machinery 
can  usually  produce  more  than  working  without  them.  Where 
this  is  true  he  is  willing  to  pay  for  the  use  of  these  equipments. 
Furthermore,  if  he  has  not  the  means  of  acquiring  the  equip- 
ments when  needed  he  is  wiUing  to  pay  a  premium  to  have  them 
now  rather  than  wait  for  them  until  he  can  earn  the  money  with 
which  to  buy  them.  This  premium  takes  the  form  of  interest 
paid  for  the  use  of  borrowed  money.  How  much  the  borrower 
is  willing  to  pay  for  the  advances  of  funds  depends  upon  what 
he  hopes  to  gain  by  their  use.  This  varies  greatly  with  dif- 
ferent people  and  with  different  investments  for  the  same 
people.  At  a  given  time  the  demand  for  loanable  funds  will 
depend  upon  the  number  of  fine  prospects  for  investments  and 
upon  the  interest  rate. 

Why  do  the  lenders  of  money  insist  on  charging  interest? 
Some  of  these  money  lenders  are  unable  to  direct  productive 
agencies.  Widows  and  orphans  are  often  given  as  examples  of 
this  class.  There  are  others  who  have  more  than  they  can 
manage  to  very  great  advantage  and  who  will  lend  the  money 
to  some  one  else  if  the  interest  rate  is  better  than  the  rate  of 
return  this  potential  lender  can  make  on  this  fund  when  used 
by  himself.  The  choice  between  lending  and  not  lending  is 
not  always  a  choice  between  two  classes  of  investments ;  it  may  be  a 
choice  between  saving  and  spending.  The  higher  the  interest 
rate  the  borrowers  are  willing  to  pay,  the  more  inducement 
there  is  to  refrain  from  present  consumption  in  order  to  have 
money  to  invest.  Some  economists  attempt  to  measure 
interest  in  terms  of  the  premium  which  people  place  tipon 
present  consumption  over  future  consumption.  Familiarity 
with  the  law  of  diminishing  utility  leads  one  to  believe 
that  after  an  individual  has  satisfied  present  wants  to  a 
certain  point,  future  wants  seem  more  important  than  the 
unsatisfied  present  wants.  The  degree  of  civilization  possessed 
will  determine  where  this  point  will  be  found.  There  are  al- 
ways people  who  will  save  whether  or  not  they  receive  a  pre- 


FARM   CREDIT  AND  THE  RATE  OF  INTEREST       187 

mium  in  the  form  of  interest  for  doing  so.  There  are  others  who 
would  not  save  even  if  the  rate  of  interest  were  very  high. 
With  people  as  they  are  at  a  given  time,  the  amount  of  saving 
will  depend  upon  the  extent  to  which  the  present  wants  seem 
more  important  than  future  wants  and  by  the  premium  offered 
in  the  form  of  interest  to  counterbalance  this  greater  present 
importance. 

It  has  been  shown  why  funds  are  useful  and  why  they  are 
scarce.  Hence  a  market  value  is  placed  upon  their  use ;  this 
market  value  expressed  in  terms  of  money  is  the  interest  charge. 
The  rate  of  interest  at  any  given  time  is  determined  by  the 
opportunities  for  productive  enterprises  and  the  number  and 
energy  of  the  men  who  want  funds  for  this  and  other  purposes, 
that  is,  the  intensity  of  the  demand  for  funds,  the  abundance 
of  funds,  and  the  relative  importance  of  present  and  future 
wants  in  the  minds  of  potential  lenders.  In  other  words, 
price-determining  forces  work  here  as  elsewhere. 

Why  is  the  rate  of  interest  different  at  (liferent  places  at  the 
same  time,  and  with  different  people  at  the  same  time  and  place  ? 
That  is,  why  is  the  rate  of  interest  not  uniform  at  all  places 
and  on  all  loans  ? 

Unevenness  of  demand.  Where  there  is  a  continuous  use 
for  funds  the  rate  will  tend  to  be  lower  than  where  there  is  a 
large  demand  for  certain  seasons  of  the  year  and  a  small  demand 
other  seasons.  If  funds  must  lie  idle  half  of  the  year  awaiting 
a  seasonal  demand,  a  high  rate  must  be  charged  for  the  time 
the  money  is  lent  in  order  to  make  up  a  normal  average  rate, 
or  else  funds  must  be  imported,  at  some  expense,  for  the  de- 
mand period  and  sent  elsewhere  for  investment  the  remainder 
of  the  year. 

Immobility  of  funds.  One  reason  for  different  rates  at  dif- 
ferent places  is  because  some  money  lenders  do  not  know  so 
much  about  the  character  of  the  investments  at  a  distance  and 
prefer  to  have  their  funds  close  at  home.  Others  are  willing  to 
lend  money  at  a  distance  but  find  that  it  costs  more  to  ascer- 
tain the  character  of  the  loan,  hence  they  must  have  a  higher 
rate,  and,  again,  when  the  financial  institutions  intervene  to 


1 88  AGRICULTURAL  ECONOMICS 

adjust  the  supply  of  funds  this  costs  something  which  must  be 
added  to  the  interest  rate.  The  interest  rate  tends,  therefore, 
to  be  lower  in  a  region  where  there  is  a  surplus  of  savings  than 
in  a  region  where  there  is  not  enough  local  saving  to  care  for 
the  needs  of  investors. 

Risk.  The  fact  that  some  loans  are  safer  than  others  is 
legitimate  ground  for  differences  in  the  interest  rates.  If  there 
is  any  chance  of  losing  the  principal,  a  certain  amount  of  in- 
surance is  added  to  the  interest  rate  to  compensate  the  money 
lender  for  taking  this  risk.  It  often  happens  that  lack  of  knowl- 
edge on  the  part  of  the  lender  makes  him  assume  the  risk  is 
great  where  it  is  really  small.  Credit  associations,  made  up  of 
farmers  who  know  each  other,  can  reduce  greatly  the  amount 
of  risk  by  eliminating  the  dangerous  loans,  and  by  carrying  for 
themselves  the  risk  which  would  otherwise  fall  upon  the  money 
lender.  This  is  one  reason  the  credit  association  can  borrow 
at  a  lower  rate  than  can  the  individual  members  of  the  asso- 
ciation. 

Interest  and  the  purchase  price.  It  frequently  happens 
that  the  rate  of  interest  upon  deferred  payments  is  fixed  as 
a  part  of  the  bargain  in  the  sale  of  a  farm.  For  example,  a 
retired  farmer  sold  his  farm  and  took  a  mortgage  for  $12,000 
at  four  and  one-half  per  cent  annual  interest.  When  asked  by 
the  writer  why  he  made  the  interest  rate  so  low,  the  reply  was, 
*'  Well,  I  was  getting  a  long  price  for  the  farm."  Often  the 
buyer  who  may  have  been  in  the  habit  of  paying  rent,  thinks 
especially  of  the  amount  he  will  have  to  pay  in  interest  each 
year.  A  desire  to  keep  this  amount  low  may  result  in  paying 
too  high  a  price  for  the  farm  if  he  is  favored  by  a  low  interest 
rate.  The  purchaser  should  keep  both  sale  price  and  interest 
rate  in  mind  when  making  the  bargain.  Otherwise  what  seems 
to  be  a  low  rate  of  interest  may  be  a  very  high  one. 

Terms  0}  payment.  The  purchaser  may  better  afford  to 
pay  a  somewhat  higher  rate  of  interest  if  he  has  the  privilege 
of  making  partial  payments  whenever  he  has  some  money, 
rather  than  to  borrow  at  a  lower  rate  for  a  long  period,  say  five 
years,  with  no  chance  to  make  payments  until  the  note  is  due. 


FARM  CREDIT  AND  THE  RATE  OF  INTEREST       189 

If  one  gradually  saves  the  whole  amount  during  the  j5ve  years 
and  deposits  in  a  savings  bank  at  a  rate  two  per  cent  less  than  he 
is  paying,  the  loss  may  be  equivalent  to  one  per  cent  on  the  face 
of  the  loan  for  the  whole  time.  Where  the  borrower  can  secure 
a  part  of  the  funds  needed  at  a  low  rate  and  a  part  at  a  higher 
rate  with  privilege  of  paying  whenever  he  has  an  even  hundred 
dollars,  he  will  be  in  a  position  to  benefit  by  both  of  these 
systems. 


CHAPTER  XVII 
RENTS  AND  PROFITS 

In  this  chapter  the  eflfort  will  be  to  describe  the  economic 
forces  which  determine  the  amount  paid  for  the  annual  use  of 
land.  This  is  important  from  the  point  of  view  of  one  making 
a  rent  contract,  and  it  is  important  from  the  point  of  view  of 
the  improvement  of  the  well-being  of  the  succeeding  genera- 
tions of  land  workers. 

The  important  economic  questions  regarding  rent  relate  to 
the  causes  which  determine  the  amount  of  rent  paid  at  a  given 
time  for  a  given  farm,  the  difference  in  the  amounts  of  rent  paid 
for  different  farms  at  the  same  time,  and  the  changes  in  the 
amounts  of  rent  on  a  given  farm  during  a  period  of  years.  Rent 
is  paid  for  only  such  farms  as  are  useful  and  scarce.  Useful 
farms  with  improvements  may  be  scarce  while  raw  land  of  the 
same  quaUty  is  abundant,  in  which  case  a  price  may  be  paid 
for  the  improvements  and  not  for  the  land.  In  any  densely 
populated  country,  however,  highly  productive  land  is  scarce 
and  people  are  willing  to  pay  for  the  privilege  of  using  it. 

The  supply  of  farm  land  may  be  increased  by  settling  unoc- 
cupied prairie  regions,  clearing  forest  lands,  draining  marshes, 
irrigating  arid  regions,  etc.,  but  it  is  generally  true  that  the  land 
to  be  secured  in  these  ways  is  less  inviting  to  the  farmers  in 
competition  for  the  use  of  land,  either  because  of  the  large  in, 
vestments  required  to  bring  the  land  into  cultivation,  which 
reduces  greatly  the  return  per  unit  of  investment  in  the  land, 
or  because  of  lack  of  fertility  or  desirable  location.  For  these 
reasons  it  has  been  common  to  think  of  the  new  increments  of 
land  supply  as  having  a  lower  degree  of  economic  productivity 
per  unit  of  investment,  that  is,  lower  efficiency,  than  the  land 
already  in  use.    On  this  assumption  Ricardo  based  his  theory 

190 


RENTS  AND  PROFITS  19I 

that  with  the  increase  of  population  rents  would  tend  to  rise. 
Exceptions  to  this  general  truth  arise  when  new  and  fertile 
regions  are  made  easily  accessible  by  the  extension  of  railways, 
by  Indian  treaties,  or  other  means  of  like  character.  When  the 
agricultural  population  is  increasing  and  the  increased  supply 
of  land  must  be  taken  from  the  less  efficient  grades,  the  trend  of 
rent  is  upwards.  When  new  and  more  efficient  grades  of  land 
are  made  available  more  rapidly  than  the  population  increases, 
the  trend  is  downward.  Thus  rents  may  rise  or  fall  according 
to  the  relative  demand  for  its  use.  By  the  middle  of  the  nine- 
teenth century  the  westward  movement  of  population  in  the 
United  States  had  reached  the  prairies  of  the  Central  States, 
where  the  cost  of  bringing  land  into  cultivation  was  at  a  mini- 
mum and  the  natural  fertility  of  the  land  was  at  a  maximum. 

With  the  expansion  of  the  corn  area  the  movement  was  first 
from  poor  corn  land  to  good,  then  from  good  to  excellent,  but 
with  the  further  expansion,  less  and  less  satisfactory  corn  land 
was  resorted  to  and  it  was  only  in  this  latter  stage  that  rents 
began  rapidly  to  rise.  This  was  partially  true  of  wheat  though 
it  is  a  question  whether  any  wheat  lands  in  the  United  States 
have  ever  surpassed  the  best  wheat  regions  of  New  York  and 
Pennsylvania.  The  significant  fact  was  the  great  abundance  of 
good  wheat  land,  which  resulted  in  the  decline  of  wheat  prices 
and  a  decline  in  the  value  of  wheat  lands  in  the  older  wheat 
regions.  The  westward  movement  brought  better  lands  into 
cultivation.  These  better  lands,  for  example,  the  black  prairie 
of  Alabama,  the  alluvial  soils  of  the  Mississippi,  and  the  black 
prairie  of  Texas,  were  selected  spots  surrounded  by  wide 
areas  of  less  useful  lands  which  were  passed  by  to  take  the  better 
lands.  The  general  eSect  was  to  reduce  prices  and  rents  for 
the  time.  As  better  and  better  corn,  wheat,  and  cotton  lands 
were  taken  up,  price  levels  were  on  the  decline,  and  many 
farmers  in  the  older  regions  suffered  a  decrement  instead  of 
getting  the  expected  unearned  increment  in  land  values.  But 
with  the  growth  of  population  the  increased  demand  for  land 
results  in  keen  competition  for  the  better  farms,  which  brings 
about  rising  rents. 


192 


AGRICULTURAL  ECONOMICS 


The  motives  that  underlie  the  actions  of  men  when  bidding 
for  the  use  of  land  are  fundamentally  the  same  as  those  that 
operate  in  determining  the  values  of  other  useful  things.  The 
theory  of  rent  is  therefore  an  attempt  to  indicate  the  way  in 
which  the  theory  of  value  works  itself  out  when  applied  to  the 
annual  value  of  land. 

While  all  land  that  is  useful  and  scarce  is  valuable,  all  such 
land  is  not  equally  valuable,  for  the  simple  reason  that  all  land 
is  not  equally  useful.  This  variation  in  usefulness  may  be  due 
to  variations  in  the  fe'rtiHty  of  the  land  or  to  differences  in  the 
location  of  the  land  with  respect  to  the  market  for  the  goods 
produced.  Economists  have  usually  thought  of  the  least 
desirable  land  in  use  at  a  given  time  as  being  rent  free.  That 
is,  it  is  assumed  that  the  least  desirable  land  will  be  in  great 
abundance  in  proportion  to  the  demand  for  such  land,  and, 
therefore,  that  no  rent  will  be  paid  for  its  use.  This  "  no- 
rent  "  land  is  then  taken  as  the  starting  point  for  measuring 
the  rent  of  the  more  useful  grades  of  land.  According  to  the 
Ricardian  Theory,^  the  rent  of  any  given  grade  of  land  is  m^eas- 
ured  by  the  difiference  in  the  value  of  the  produce  resulting  from 
a  given  outlay  of  labor  and  capital  on  that  land,  and  on  the  no- 
rent  land.  For  example,  suppose  a  farmer  can,  with  the  same 
effort  and  expenditure,  produce  goods  as  shown  in  Table  XL 

TABLE  XI 

Ricardian  Remt 


On  first-grade  land  .  .  .  . 
On  second-grade  land  .  .  . 
On  third-grade  land  .  .  .  . 
On  fourth-grade  land  .  .  . 
On  fifth-grade  land  .  .  .  . 
On  sixth-grade  or  no-rent  land 


fSoo 
400 
300 
200 
100 
000 


The  assumption  is  that,  if  all  these  grades  of  land,  and  no 
more,  are  needed  to  supply  the  market,  competition  will  tend 
to  make  the  rent  of  the  requisite  quantity  of  fifth-grade  land 
$100,  that  of  fourth-grade  $200,  that  of  third-grade  $300,  that 

>  David  Ricardo,  "Principles  of  Political  Economy  and  Taxation,"  Chapter  II. 


RENTS  AND  PROFITS 


193 


of  second-grade  $400,  and  that  of  the  first  grade  $500.  This 
is  said  to  be  true  because  it  is  assumed  that  the  farmer  can  as 
well  afford  to  pay  these  sums  as  use  the  no-rent  land.  This 
theory  ignores  the  variation  in  the  efl&ciency  of  the  factors 
other  than  land,  and,  while  it  shows  the  differential  character 
of  rent,  which  was  the  point  Ricardo  was  emphasizing,  it  cannot 
be  regarded  as  a  measure  of  rent. 

Many  economists  have  ignored  variations  in  the  efficiency 
of  farmers,  manufacturers,  and  men  of  commerce,  but  others, 
following  Walker,^  adhere  to  a  theory  of  profits  analogous 
to  the  Ricardian  theory  of  rent.  They  believe  that  all  farmers 
are  not  equally  efficient,  and  that  the  farmers  who,  because  of 
their  better  judgment  and  greater  skill,  manage  their  farm  opera- 
tions better  than  their  competitors,  are  able  to  secure  larger 
returns  from  the  same  expenditures  for  labor  and  equipment 
on  the  same  grade  of  land.  These  economists  would  assume  the 
returns  given  for  the  various  grades  of  land  in  the  above  illustra- 
tions to  be  the  product  of  the  least  capable  farmer  needed  to 
supply  the  demand  for  agricultural  products,  and  that  the  farmer 
whose  ability  is  superior  to  that  of  the  least  capable  farmer  will 
be  in  a  position  to  secure  a  profit.  The  profit  of  a  given  farmer 
will  be  measured,  it  is  said,  by  the  difi'erence  in  the  value  of 
the  product  that  he  can  secure  and  the  value  of  the  product 
secured  by  the  least  capable  farmer,  with  a  given  outlay  on 
a  given  grade  of  land.  For  example,  suppose  that  with  a  given 
outlay  on  no-rent  land  (that  is,  on  the  least  useful  land  needed 
to  supply  the  demand  for  agricultural  products)  the  value  of  the 
product  secured  by  the  different  grades  of  farmers  is  as  follows : 


TABLE  XII 

Product 

Profit 

Farmer  A 

$1000 
900 
800 
700 
600 
500 

$500 

Farmer  B 

400 
300 
200 

Farmer  C 

Farmer  D 

Fanner  E 

100 

Farmer  F 

000 

1  Francis  A.  Walker,  "Political  Economy,"  chapter  on  Profits. 


194  AGRICULTURAL  ECONOMICS 

The  assumption  is  that,  if  the  produce  of  all  these  grades  of 
farmers,  and  no  more,  is  in  demand,  Farmer  F  will  just  be  able 
to  pay  expenses,  including  a  living  for  himself  and  his  family, 
but  Farmer  E  can  retain  a  profit  of  $ioo,  D  $200,  C  $300, 
B  $400,  and  A  $500,  because  the  more  efficient  farmers  secure 
larger  returns  in  value,  as  a  result  of  the  same  outlay,  than 
does  the  marginal  farmer.  This  larger  return  may  be  due  to 
the  ability  of  a  more  efficient  farmer  to  secure  more  produce  of 
the  same  quality,  or  to  produce  a  better  quality  of  products, 
or  at  the  same  time  to  produce  more  and  of  a  better  quality. 

The  influence  of  variations  in  eflBciency  on  rents  and  profits. 
These  theories  of  rent  and  profits  point  in  the  direction  of  the 
truth  but  fall  short  of  an  accurate  statement  because  they  leave 
out  of  account  at  least  three  important  considerations,  namely, 
(i)  the  influence  of  variation  in  the  efficiency  of  farmers  on  the 
amount  of  competitive  rent;  (2)  the  influence  of  variations  in 
usefulness  of  land  on  the  amount  of  profits ;  and  (3)  the  in- 
fluence of  the  variation  of  the  usefulness  of  equipments  and  of 
hired  laborers  on  rents  and  profits.  Each  of  these  points  may, 
to  advantage,  receive  our  attention.  . 

To  illustrate  the  way  these  forces  will  tend  to  determine  the 
amount  of  rent  and  profits,  let  the  figures  in  the  following  table 
represent  the  value  of  the  gross  product  that  the  farmers  of  the 
respective  grades  can  produce  as  a  result  of  an  outlay  of  five 
hundred  dollars  for  labor  and  for  the  use  of  equipments,  our 
fixed  unit  of  expenditure  on  the  different  grades  of  land.  It 
will  be  assumed,  in  this  illustration,  that  the  more  efficient 
farmers  always  invest  the  given  outlay  in  the  more  productive 
forms  of  l^abor  and  equipments.  In  order  to  make  this  and  the 
foregoing  illustrations  include  the  element  of  variation  in  in- 
tensity of  culture,  we  have  taken  a  fixed  outlay  for  labor  and 
for  the  use  of  equipments,  instead  of  a  fixed  area  of  land.  If, 
therefore,  100  acres  be  the  area  of  sixth-grade  land  on  which  this 
expenditure  is  made,  less  than  100  acres  of  the  more  useful 
grades  are  likely  to  be  cultivated  with  this  same  outlay,  for  it 
is  usually  true  that  the  more  useful  the  land,  the  more  intensive 
the  culture  that  is  most  profitable. 


RENTS  AND  PROFITS 


195 


TABLE  XIII 


Grades 

OF 

Grades  of  Land 

Profits 

Farmers 

First 

Second 

Third 

Fourth 

Fifth 

Sixth 

A      . 
B      . 
C      . 
D     . 
E      . 
F      . 
Rent 

$2000 
1800 
1600 
1400 
1200 
1000 
725 

$1800 
1620 
1440 
1260 
1080 
900 
540 

$1600 

1440 

1280 

1 1 20 

960 

800 

375 

$1400 
1260 
1 1 20 
980 
840 
700 
230 

$1200 
1080 
960 
840 
720 
600 
I  OS 

$1000 
900 
800 
700 
600 
500 
000 

$775 
580 
40s 
250 

IIS 
000 

Note  that  in  Table  XIII  the  figures  representing  the  product 
of  the  F-grade  farmer  on  the  different  grades  of  land  are  the 
same  as  in  Table  XI,  where  the  Ricardian  theory  of  rent  was 
illustrated.  Note  also  that  the  figures  representing  the  prod- 
uct of  the  various  grades  of  farmers  on  sixth-grade  land  are 
the  same  as  those  used  in  Table  XII,  where  Walker's  theory  of 
profits  is  illustrated.  And  note  further  that  the  remainder  of 
this  table  is  the  result  of  simply  following  out  logically  the  as- 
sumption in  the  two  preceding  tables.  That  is,  in  this  table, 
instead  of  stopping  with  a  statement  of  the  variations  in  the 
product  of  the  different  grades  of  land  when  farmed  by  the 
F-grade  farmer,  and  a  statement  of  the  variation  of  the  product 
of  the  different  grades  of  farmers  on  the  sixth-grade  land,  we 
here  give  a  statement  of  the  product  which  each  grade  of  farmers 
produce  upon  each  grade  of  land,  also  the  rent  and  the  profits 
which  would  be  approximated,  in  the  case  of  free  competition 
among  the  different  grades  of  farmers  for  the  various  grades  of 
land. 

It  is  here  assumed  that  the  F-grade  farmer,  when  operating 
sixth-grade  land  and  a  corresponding  grade  of  labor  and  equip- 
ment, will  just  be  able  to  make  a  living  without  paying  any 
rent  for  the  use  of  the  land.  In  other  words,  we  have  here  a 
no-profit  farmer  operating  no-rent  land.  On  a  basis  of  the 
figures  in  Table  XIII,  the  F-grade  farmer  can  afford  to  pay  $100 
as  rent  for  the  quantity  of  fifth-grade  land  on  which  he  would 


196  AGRICULTURAL  ECONOMICS 

make  the  same  outlay  as  on  100  acres  of  sixth-grade  land,  for, 
instead  of  a  product  worth  $500,  he  would  there  be  able  to 
secure  a  product  worth  $600.  Following  the  same  reasoning, 
the  F-grade  farmer  could  afford  to  pay  $200  for  the  fourth- 
grade  land,  $300  for  the  third-grade  land,  $400  for  the  second- 
grade  land,  and  $500  for  the  first-grade  land. 

When  all  the  grades  of  land  are  viewed  from  the  standpoint 
of  the  A-grade  farmer,  it  becomes  apparent  that  he  can  make  a 
profit  on  land  of  any  of  these  grades,  and  that  he  would  do  as 
well  to  pay  a  rent  of  $200  for  the  use  of  the  fifth-grade  land, 
$400  for  the  use  of  the  fourth-grade  land,  $600  for  the  third, 
$800  for  the  second,  and  $1000  for  the  use  of  the  first-grade 
land,  as  to  farm  the  sixth-grade  land  rent  free.  But  is  there  a 
competitor  who  will  make  the  A-grade  farmer  pay  the  price? 
This  we  must  ascertain  by  studying  the  interests  of  the  competi- 
tors. 

The  E-grade  farmer  is  able  to  produce  $600  worth  of  products 
on  the  sixth-grade  land,  leaving  him  a  profit  of  $100.  It  can- 
not be  expected  that  he  will  be  willing  to  accept  less  profit 
from  land  of  any  other  grade.  He  can  pay  $120  as  rent  for  the 
amount  of  fifth-grade  land  on  which  the  same  outlay  is  made 
as  on  the  100  acres  of  sixth-grade  land,  and  retain  the  same 
profits,  $720  — ($5oo+$ioo)  =$120.  But  the  F-grade  farmer 
can  bid  no  more  than  $100  for  the  use  of  the  fifth-grade  land, 
and,  so  far  as  he  is  concerned,  the  E-grade  farmer  can  have  the 
fifth-grade  land  for  anything  over  $100,  and  can  give  a  balance 
to  turn  the  bargain.  Let  us,  in  this  illustration,  figure  that 
he  will  pay  $105.  This  will  leave  him  a  profit  of  $115; 
$720  — ($5oo+$io5)  =$115.  In  bidding  for  the  fourth-grade 
land,  he  could  not  be  expected  to  accept  a  smaller  profit.  His 
gross  income  on  fourth-grade  land  is  $840.  This,  minus  the 
$500  outlay  and  the  $115  profit  that  he  could  make  on  fifth- 
grade  land,  leaves  $225  as  the  maximum  rent  that  the  E-grade 
farmer  can  bid  for  the  fourth-grade  land. 

When  the  rent  of  fifth-grade  land  is  S105,  the  D-grade  farmer 
can  secure  a  profit  of  $235  on  that  grade  of  land, 
$840  — ($5oo-|-$io5)  =$235.    He  could  secure  this  same  profit 


RENTS  AND  PROFITS  197 

on  fourth-grade  land  and  pay  a  rental  of  $245  for  its  use, 
$98o-($5oo+$235)=$245.  But  so  far  as  the  competition 
of  his  inferiors  is  concerned,  any  amount  over  $225,  let  us 
say  $230,  is  all  the  D-grade  farmer  need  pay  for  fourth-grade 
land.  This  will  leave  him  a  profit  of  $250,  $980  — ($5oo-f  $230) 
=  $250,  which  is  $15  more  than  he  could  make  on  fifth-grade 
land  at  the  rent  the  E-grade  farmer  is  willing  to  pay.  To 
secure  the  same  profit  on  third-grade  land  the  D-grade  farmer 
cannot  pay  more  than  $370  for  its  use,  $1120  — ($5oo-|-$25o)  = 
$370.  But  the  C-grade  farmer,  whose  profits  on  fourth-grade 
land  at  a  rental  of  $230  would  be  $390,  $1120  — ($5oo-f$23o)  = 
$390,  can  secure  the  same  profit  from  third-grade  land  after 
paying  $390  as  rent,  $1280 -($500-!- $390)  =$390.  It  will 
be  profitable,  therefore,  for  C-grade  farmer  to  outbid  the  D- 
grade  farmer  for  the  use  of  the  third-grade  land  by  paying  $375, 
for  this  will  leave  him  a  profit  of  $405  ;  $1280  — ($500-}- S375)  = 
$405.  To  secure  the  same  profit  on  second-grade  land,  the 
C-grade  farmer  can  bid  no  more  than  S535  for  its  use,  $1440  — 
($5oo+$405)=$535.  But  the  B-grade  farmer  whose  profit 
on  third-grade  land  at  a  rental  of  $375  would  be  $565,  $1440  — 
($5oo+$375)=$565,  can  secure  the  same  profit  from  second- 
grade  land  after  paying  a  rental  of  $565  as  rent,  $1620  — 
($5oo+$565)=$555.  It  will  be  profitable  for  him,  therefore, 
to  outbid  the  C-grade  farmer  for  second-grade  land  by  paying 
$540.  This  will  leave  him  a  profit  of  S580;  $1620 -(S500 
+$540)  =$580.  The  B-grade  farmer  could  pay  no  more  than 
$720  for  the  use  of  the  first-grade  land  and  retain  this  same  net 
profit,  $1800 -($5ooH-$58o)  =$720;  but  the  A-grade  farmer 
can  pay  any  amount  up  to  $740  for  first-grade  land  rather  than 
take  second-grade  land  at  $540 ;  for  his  profit  on  second-grade 
land  would  be  $760 ;  $1800  -  ($5oo-f$54o)  =$760,  and  $2000  - 
($5ooH-$76o)  =$740.  As  $720  is  the  most  any  other  ct)mpeti- 
tor  can  pay  for  the  use  of  first-grade  land,  the  A-grade  farmer 
can  secure  this  grade  of  land  for  a  fraction  over  that  amount, 
let  us  say,  $725,  and  retain  a  profit  of  $775. 

It  is  a  matter  of  common  observation  that  competition  tends 
to  distribute  the  farmers  on  the  diiierent  grades  of  land  in  ac- 


198  AGRICULTURAL  ECONOMICS 

cordance  with  their  efficiency,  the  A-grade  farmer  on  the  first- 
grade  land,  the  B-grade  farmer  on  the  second-grade  land,  and 
so  on.  The  fact  that  each  grade  of  farmers  can  win  a  larger 
profit  on  the  grade  of  land  that  corresponds  to  his  degree  of 
efficiency  is  the  force  that  tends  to  bring  about  this  condition  of 
affairs.  But  it  is  not  the  individual  farmers  alone  who  are 
benefited  as  the  result  of  the  working  out  of  this  tendency. 
The  combination  of  the  productive  forces  that  puts  the  most 
useful  agents  of  production  into  the  hands  of  the  most  efficient 
farmers  results  in  the  largest  total  production  of  economic 
goods  for  the  country  as  a  whole. 

These  points  may  be  illustrated  by  use  of  Table  XIII.  Let 
the  student  calculate  the  profits  that  each  farmer  could  make 
on  the  various  grades  of  land  and  it  will  become  more  clear  that 
competition  makes  the  rents  of  the  various  grades  of  land  such 
that  the  farmer's  profit  is  the  greatest  on  the  land  to  which  his 
grade  of  efficiency  adapts  him.  Again,  let  the  student  cal- 
culate the  total  value  of  the  product  of  all  grades  of  land  when 
the  A-grade  farmer  is  on  the  first-grade  land,  the  B-grade 
farmer  on  the  second-grade  land,  and  on  down  the  list. 
($2ooo+$i62o+$i28o-f$98o-f$72o-|-$5oo  =  $7ioo);  then  let 
him  try  any  other  combination,  and  it  will  be  found  that  no 
other  combination  of  the  grades  of  farmers  and  land  will  result 
in  so  large  a  total  product. 

In  actual  practice  it  is  evident  that  custom,  sentiment,  and 
lack  of  knowledge  retard  the  operations  of  the  economic  forces 
to  the  detriment  of  individual  and  national  well-being.  Yet 
the  fact  has  long  been  recognized  that  the  farmers  who  are  the 
most  efficient  do  actually  tend  to  get  the  best  grades  of  land 
and  equipment. 

This  analysis  of  the  forces  of  distribution  forms  the  basis  for 
drawing  some  significant  conclusions.  First :  It  makes  a  dif- 
ference which  grade  of  land  the  farmer  chooses.  The  farmer  who 
is  the  most  efficient  can  secure  the  highest  profits  from  the  land 
that  is  most  useful  for  his  lines  of  production.  This  is  likewise 
true  of  the  labor  and  equipment  employed  by  him.  Second : 
All  farmers  of  superior  ability  may  save  from  their  profits  and 


RENTS  AND  PROFITS  1 99 

thus  get  ahead  in  the  world,  i.e.  "  the  iron  law  oj  wages  "  operates 
only  for  the  marginal  farmer.  Third :  the  farmer  can  make  use 
of  the  highest  degree  of  skill  and  knowledge  without  fear  that  the 
landlord  will  he  able  to  take,  in  the  form  of  a  higher  rent,  all  of 
the  extra  product  due  to  more  efficient  management. 

Thus  far  rent  and  profits  have  been  considered  at  a  given  time 
with  a  given  supply  of  land,  equipments,  laborers,  and  farmers, 
and  a  given  market  condition.  It  is  well  recognized  that  with 
the  passing  of  time,  the  relative  abundance  of  the  factors  of 
production  changes,  market  conditions  change,  and  the  degree 
of  skill  and  knowledge  changes,  resulting  in  changes  in  the 
amount  of  rent  paid  for  a  given  piece  of  land. 

With  the  growth  of  population  a  double  effect  on  rent  tends 
to  follow:  First,  increased  demands  for  produce  increase  the 
price  of  the  products  so  that  the  rent  measured  in  terms  of  money 
will  rise  even  though  the  share  of  the  product  going  to  land 
remains  the  same.  Then  again  the  growth  of  population  and 
the  resulting  increase  in  competition  for  the  use  of  the  land 
tends  to  make  people  willing  to  take  up  land  formerly  considered 
too  poor  to  make  it  worth  while  to  cultivate  it,  but  before 
taking  this  inferior  land  they  will  bid  higher  for  the  land 
already  in  cultivation  and  this  will  result  in  an  increase  in 
the  proportion  of  the  product  paid  for  the  use  of  land.  On 
the  other  hand,  improvements  in  the  means  of  transportation 
which  will  result  in  an  increase  in  the  supply  of  good  farm 
land  more  rapidly  than  the  farm  workers  increase  will  tend  to 
reduce  the  share  of  the  product  paid  for  the  use  of  the  land. 
This  was  true  during  the  period  following  the  extension  of  rail- 
ways into  the  prairies  of  the  North  Central  States.  The  general 
principle  is  that  with  changes  in  the  relative  abundance  of  land, 
labor,  and  capital,  the  most  slowly  increasing  factor  is  in  a  posi- 
tion under  conditions  of  free  competition  to  command  an  in- 
creasing proportion  of  the  product. 

The  withdrawal  of  large  numbers  of  farm  workers  from 
agriculture  in  case  of  great  national  emergencies  like  the  world 
war  will  tend  to  increase  the  proportion  going  to  the  human 
factor  and  reduce  the  proportion  if  not  the  amount  of  rent. 


200  AGRICULTURAL  ECONOMICS 

On  the  other  hand,  the  call  of  patriotism  and  high  prices  may 
stimulate  men  to  utiUze  more  completely  their  maximum  po- 
tential capacity  for  farm  work.  This  will  tend  to  overcome  the 
tendency  for  rents  to  fall,  for  increasing  the  capacity  of  men 
means  that  each  man  will  demand  more  land,  which  will  in 
turn  tend  to  increase  rent  or  at  least  retard  its  fall. 

The  increase  in  the  efl&ciency  of  men,  which  results  in  more 
produce  from  the  same  amount  of  land  and  labor,  will,  other 
things  being  the  same,  tend  to  reduce  rents  for,  with  the  demand 
for  produce  remaining  the  same,  increased  supply  will  tend  to 
lower  the  prices  of  produce.  While  this  would  be  the  first 
effect,  lower  prices  would  tend  to  stimulate  population  and  in 
the  long  run  increased  efl&ciency  will  enable  a  growing  popula- 
tion to  encroach  farther  and  farther  down  the  scale  to  less  and 
less  productive  land  and  bid  higher  and  higher  for  the  good 
land,  driving  rents  higher  than  they  could  have  been  without 
the  increased  human  efl&ciency. 

The  accumulation  of  capital  may  result  in  the  increase  of  rents, 
and  the  reduction  in  the  supply  of  capital  available  for  agricul- 
ture may  reduce  rents.  The  growth  of  the  capital  supply 
normally  tends  to  reduce  the  rate  of  interest,  and  the  price  of 
equipments,  and  for  these  two  reasons  stimulate  the  buying 
of  farm  equipments,  which  not  only  tends  to  increase  the  total 
product  of  the  land  but  to  give  a  larger  proportion  of  the 
produce  to  the  owner. 

Any  improvement  in  the  type  of  farming  in  a  given  locality 
which  will  give  more  nearly  continuous  profitable  employment 
throughout  the  year,  either  by  using  more  land  or  by  providing 
more  profitable  labor  on  a  given  piece  of  land,  will  tend  to  give 
an  increased  proportion  of  the  produce  to  the  owner  of  the 
land. 

Tnus  while  it  is  true  that  differences  exist  among  men 
as  well  as  among  the  different  grades  of  land,  which  give  basis 
for  a  special  differential  return  in  the  form  of  profits  to  men, 
it  is  true  also  that  competition  may  result  in  the  decrease  of 
one  of  these  surpluses  to  the  advantage  of  the  other.  If  farmers 
and  workmen  and  equipments  increase  more  rapidly  than  land 


RENTS  AND  PROFITS 


20I 


of  the  quality  in  use,  competitive  forces  tend  to  increase  rent 
at  the  expense  of  the  return  to  the  other  factors. 

Figure  lo  is  intended  to  illustrate  the  distribution  of  the 
gross  returns  of  the  agricultural  industry,  among  the  factors  of 
production.  This  illustration  is  based  upon  Table  XIII  and  it 
is  assumed  that  the  factors  will  be  brought  together  in  the  most 
productive  manner,  that  is,  with  the  most  efiScient  farmers 
operating  the  most  efficient  forms  of  equipments  upon  the  most 
efficient  land,  and  that  these  factors  are  associated  in  the  proper 


I 
I 
I 

I 


-----■^H' 


J, 

B 


Figure  io 


proportion.  Under  these  conditions  the  composite  units  which 
are  made  up  of  the  most  productive  grades  of  the  factors  will 
yield  a  relatively  larger  product,  in  proportion  to  their  pro- 
ductivity, even,  than  the  units  made  up  of  the  less  productive 
grades  of  the  factors,  and  hence,  in  the  higher  grades  each  factor 
will  receive  the  necessary  minimum  and  a  further  differential 
due  to  superior  efficiency  and  to  the  cooperation  of  the  more 
productive  grades  of  the  factors. 

When  the  subject  of  distribution  is  viewed  from  the  stand- 
point of  industrial  progress,  through  a  long  period  of  years, 


202  AGRICULTURAL  ECONOMICS 

the  most  important  fact  to  be  considered  is  that  the  other  fac- 
tors usually  increase  more  rapidly  than  does  land.  As  the 
farmers  and  the  equipments  continue  to  increase  more  rapidly 
than  the  land,  some  of  the  better  grades  of  these  more  rapidly 
increasing  factors  are  crowded  down  farther  and  farther  upon 
the  less  and  less  productive  land.  This  necessarily  results 
in  the  driving  out  of  business  of  some  of  the  lower  grades  of 
farmers  and  equipments,  leaving  upon  the  margin  higher 
grades  of  these  factors,  which  will  be  able  to  earn  their  necessary 
minimum  upon  lower  grades  of  land,  and  hence  the  margin  of 
cultivation  may  be  driven  down  to  less  productive  land  by  the 
competition  of  the  increasing  numbers  of  farmers  and  the  in- 
creasing supplies  of  equipments.  The  resulting  change  in  the 
distribution  of  the  gross  product  among  the  factors  is  illustrated 
by  the  dotted  lines  in  Fig.  lo,  where  it  will  be  noted  that  the  rent 
rises  as  a  result  of  a  fall  in  the  returns  to  the  other  factors  of 
production. 

It  is  possible  for  the  rent  to  rise,  however,  without  any 
absolute  decline  in  the  returns  to  the  other  factors.  Changes 
in  the  prices  of  agricultural  products  will  greatly  influence  the 
share  which  will  be  accounted  to  land.  When,  as  a  result  of 
increased  demand  for  food  and  clothing,  the  prices  of  agri- 
cultural products  rise,  the  share  of  the  returns  of  a  given  farm 
which  may  be  credited  to  land  increases.  When,  for  any  reason, 
such  as  the  opening  of  vast  areas  of  very  productive  land,  the 
prices  of  agricultural  products  fall,  the  share  of  the  gross  re- 
turns which  can  be  paid  for  the  use  of  land  will,  other  things 
remaining  the  same,  necessarily  fall,  and  the  movement  will 
tend  to  be  the  reverse  of  that  shown  in  Fig.  lo. 

The  laws  of  value  and  price  hold  true  with  respect  to  the 
price  which  is  paid  for  the  use  of  land  and  equipments ;  but 
as  we  have  seen,  the  conditions  of  supply  and  demand  are  very 
complex,  and  the  difficult  problems  in  distribution  arise  out  of 
the  fact  that  costs  and  prices  do  not  correspond  except  on  the 
margin  where  the  least  productive  of  all  of  the  factors  are 
brought  together,  and  that  there  are  large  surpluses  over 
costs,  to  be  divided.    It  was  one  time  thought  that  all  of  this 


RENTS  AND  PROFITS  203 

surplus  should  be  attributed  to  land ;  but  in  recent  years  econo- 
mists have  come  to  see  that  each  of  the  factors  is  in  a  position  to 
command  a  share  of  the  surplus,  that  the  share  secured  by  each 
is  worked  out  through  supply  and  demand,  and  that  the  most 
slowly  increasing  factor  tends  to  receive  a  larger  and  larger 
proportion  of  the  surplus. 


CHAPTER  XVIII 
THE  VALUE   OF  FARM  LAND  AND  EQUIPMENTS 

It  is  easy  to  say  that  the  price  of  land,  Hke  the  price  of  any 
other  economic  good,  is  determined  by  the  forces  and  conditions 
which  regulate  the  demand  and  the  supply;  but  this  is  too 
general  to  be  of  any  help  to  the  farmer  who  is  trying  to  esti- 
mate the  value  of  a  particular  piece  of  land. 

The  net  rent,  or  the  share  of  the  gross  returns  which,  under 
conditions  of  free  competition,  is  credited  to  land,  above  what 
is  necessary  to  keep  the  land  intact,  is  the  starting  point  for 
figuring  the  value  of  a  piece  of  land.  When  a  man  invests  in 
land,  the  thing  for  whicji  he  really  pays  is  the  perpetual  right 
to  use  the  land  and  to  be  free  from  the  payment  of  rent,  or  to 
receive  the  income  which  the  land  will  yield  if  leased  to  some  one 
else. 

The  essential  difference  between  the  buying  of  a  piece  of 
land  and  the  buying  of  a  perpetual  annuity  bond  lies  in  the  fact 
that  while  the  income  from  the  latter  is  fixed  in  terms  of  a  money 
income,  the  former  may  rise  or  fall  as  a  result  of  changes  in 
the  conditions  of  competition  for  the  use  of  land,  or  from  changes 
in  the  value  of  the  unit  of  the  standard  of  value. 

Let  it  be  assumed  that  the  net  rent  of  a  given  acre  of  land  is 
six  dollars.  On  the  further  assumption  that  this  amount  will 
not  change,  we  may  think  of  this  acre  of  land  as  a  perpetual 
bearer  of  an  annual  income  of  six  dollars.  Six  dollars  this  year, 
six  dollars  next  year,  and  the  next,  and  so  on  so  long  as  time 
shall  last.  The  total  amount  of  rent  which  may  be  received  from 
this  land  is  incalculable.  If  there  is  no  limit  to  the  number 
of  years  during  which  rent  may  be  received  for  the  use  of  this 
land,  then  the  amount  of  rent  to  be  received  may  become  in- 
finitely great,  and  if  one  were  required  to  pay  down  the  full 

ao4 


THE  VALUE  OF  FARM  LAND  AND  EQUIPMENTS      205 

amoant  of  all  these  possible  rents,  which  the  future  years  may 
possibly  yield,  the  price  of  land  would  be  such  that  no  man  could 
purchase  it. 

As  a  matter  of  fact,  however,  the  present  market  value  of 
the  perpetual  rent  bearer  is  often  not  more  than  twenty  times 
the  net  rent,  and  it  is  seldom  more  than  thirty  times  the  rent. 
This  is  explained  by  the  fact  that  present  wants  are  estimated 
more  highly  than  future  wanls,  which  leads  to  the  discounting 
of  future  incomes  ^  "at  a  rate  that  reflects  the  prevailing 
premium  on  the  present."  The  rent  which  will  be  due  one  year 
from  date  is  discounted  at  this  prevailing  rate,  and  so  it  is  for 
all  the  succeeding  rents.  The  present  values  of  the  succeeding 
future  rents  grow  smaller  and  smaller  as  the  time  one  must  wait 
for  them  becomes  greater  and  greater,  until  finally  the  rent 
which  is  due  at  the  end  of  an  infinite  period  of  time  would  be 
infinitesimal. 

When  the  rate  of  discount  is  five  per  cent,  for  example,  the 
present  valuation  of  a  six-dollar  rent  which  will  be  due  in  ten 
years  is  approximately  three  dollars  and  sixty-eight  cents; 
the  six-dollar  rent  which  is  due  after  twenty  years  has  a  present 
valuation  of  about  two  dollars  and  twenty-four  cents ;  and  the 
six-dollar  rent  which  is  due  in  forty  years  has  a  present  value 
of  about  eighty-four  cents.  If  this  process  of  discounting  future 
rents  be  carried  far  enough,  the  point  would  finally  be  reached 
where  the  present  value  of  the  future  rent  is  too  small  to  be 
taken  into  account.  The  present  value  of  the  rent  which  is 
due  after  an  infinite  number  of  years  is  infinitesimal.  If  the 
present  values  of  all  these  future  rents  be  added  together,  the 
sum  would  be  the  present  capital  value  of  the  land,  or  the  amount 
of  capital  which,  if  lent  at  a  rate  of  five  per  cent  per  annum, 
would  yield  the  same  income  as  the  land  is  yielding  at  the  present 
time. 

The  simple  mathematical  method  of  finding  this  "  sum  " 
is  to  divide  the  annual  value,  that  is,  the  net  rent,  by  the  rate 
which  "  reflects  the  prevailing  premium  on  the  present."    If 

»  Frank  A.  Fetter,  Publications  oj  the  Am.  Econ.  Assn.,  Papers  and  Proceedingi 
of  the  Sixteenth  Annual  Meetmg,  Part  I,  p.  196. 


206  AGRICULTURAL  ECONOMICS 

the  net  annual  income  derived  from  a  piece  of  land  is  six  dollars 
per  acre,  and  the  rate  of  discount  is  five  per  cent,  the  present 
capital  value  of  the  land  would  be  one  hundred  and  twenty 
dollars  per  acre.  One  hundred  and  twenty  dollars  is,  then, 
the  amount  of  money  which,  if  lent  at  five  per  cent,  would 
yield  an  annual  net  income  of  six  dollars.  This  is  usually  spoken 
of  as  the  capital  value  of  the  land. 

That  this  simple  method  of  dividing  the  six-dollar  net  rent 
by  the  prevailing  rate  of  discount  to  find  the  capital  value  of  a 
piece  of  land  is  equivalent  to  finding  the  sum  of  an  infinite 
series  of  prospective  net  annual  three-dollar  rents  discounted 
at  the  same  rate  may  be  demonstrated  as  follows : 

The  present  value  of  a  dollars  due  in  /  years  if  the  interest 

be  compounded  annually  at  the  rate  of  r  would  be  ,        y  since 

X  dollars  compounded  at  rate  r  would  give  X{i-\-ry,  and  if 

Xii+rY=a  then   X  =  -, — ; — r,.     If  then  the  net  income  of  a 
(i+r)' 

farm  be  a  dollars  a  year  its  value  would  be  expressed  by  the 

equation :        V  =  — — \- -, — r—r,+  } — r-ri  +  } — rr;  +  ad      inf. 
^  i+r      (i+r)2      {i-\-ry      (i+r)" 

This  is  an  infinite  "  geometrical  "  progression  with  first  term 

and  ratio  —7—.    The  limit  of  the  sum  of  such  a  series  is 

a 
—  which  reduces  to  -.    We  have  then  the  formula  for 


r 

the  value :   V=-  which  is  the  ordinary  method  of  capitalizing 
r 

rent. 

As  a  matter  of  fact,  however,  the  present  capital  value  of  the 

land  as  determined  in  this  way  does  not  often  correspond  with 

the  price  which  is  paid  for  land.     There  are  several  important 

reasons  for  this  difference.     First  it  is  not  certain  that  the  annual 

income  that  can  be  drawn  from  one  hundred  and  twenty  dollars 

will  always  be  six  dollars.    The  rate  of  interest  may  fall  to  four 


THE  VALUE  OF  FARM  LAND  AND  EQUIPMENTS      207 

per  cent,  which  would  reduce  the  income  to  be  derived  from  that 
amount  of  money  to  four  dollars  and  eighty  cents,  while  the 
annual  income  from  the  land  would  not  be  reduced  by  a  lower- 
ing of  the  current  rate  of  interest.  The  belief  that  there  is  a 
greater  probabiUty  of  a  dechne  in  the  income  to  be  derived 
from  the  money  than  from  the  land,  often  makes  men  willing 
to  pay  more  for  land  than  the  amount  of  capital  which  will 
now  yield  the  same  income. 

Another  reason  which  leads  men  to  pay  more  for  land  than 
a  money  loan  which  will,  at  the  present  time,  yield  the  same 
income,  is  the  beUef  that  with  the  progress  of  society  the  compe- 
tition for  the  use  of  land  will  result  in  a  rise  in  rents,  that, 
while  there  is  a  tendency  for  the  annual  income  which  can  be 
derived  by  lending  a  given  amount  of  money  to  dechne,  there 
is  at  the  same  time  and  under  like  conditions  a  tendency  for 
the  income  of  a  given  amount  of  land  to  increase. 

The  available  land  supply  of  a  country  usually  increases 
less  rapidly  than  the  population,  so  that  it  becomes  necessary 
to  resort  to  land  which  is  either  less  fertile,  less  favorably 
situated,  or  more  difl&cult  to  bring  under  cultivation;  and  as 
a  result  of  keener  competition  for  the  better  grades  of  land  the 
amount  which  will  be  offered  for  the  use  of  such  land  will  rise. 
While  this  is  what  usually  happens  in  the  long  run,  it  sometimes 
happens  that  the  discovery  of  great  quantities  of  very  fertile 
land,  and  the  invention  of  better  means  of  transportation  mak- 
ing this  new  land  more  accessible,  will  for  a  time  reduce  the 
competition  for  the  land  which  was  already  under  cultivation, 
and  the  rent  of  such  land  may,  for  a  time,  be  reduced ;  but  it  is 
beUeved  that  the  occasional  reactions  of  this  kind  cannot  per- 
manently counteract  the  tendency  for  the  price  of  land  to  rise. 

The  land  which  yields  the  highest  rent  at  one  time  may  be 
surpassed  in  the  amount  of  rent  which  it  will  yield  at  another 
time,  by  land  which  was  formerly  let  for  a  smaller  rent.  This 
may  be  the  result  (i)  of  the  introduction  of  a  new  crop  which 
thrives  best  on  the  land  which  for  other  purposes  was  counted 
inferior;  (2)  it  may  be  the  result  of  a  dense  population  in  a 
region  which  had  formerly  been  sparsely  populated,   in  other 


2o8  AGRICULTURAL  ECONOMICS 

words,  the  development  of  a  better  home  market ;  (3)  it  may 
be  the  result  of  an  improvement  in  the  means  of  communica- 
tion which  makes  the  land  which  was  formerly  more  fertile 
but  less  accessible,  equally  accessible,  and  hence,  more  valu- 
able ;  or  (4)  it  may  be  the  result  of  a  rise  in  the  prices  of  agri- 
cultural produce,  or  a  fall  in  the  current  rate  of  interest,  either 
of  which  would  result  in  a  more  rapid  increase  in  the  value  of 
land  which  is  more  fertile  and  accessible,  but  which  requires 
relatively  larger  expenditures  to  bring  it  into  cultivation, 
than  in  the  value  of  land  which  is  less  fertile  or  accessible  but 
much  more  easily  brought  into  cultivation.  All  of  these  pos- 
sible variations  in  the  annual  value  of  land  must  be  properly 
anticipated  and  included  in  the  list  of  future  incomes  which 
are  discounted  to  find  their  present  values. 

Perhaps  enough  has  been  said  to  impress  the  thoughtful 
reader  with  the  fact  that  to  determine  the  value  of  a  piece  of 
land  is  by  no  means  a  simple  matter.  When  a  man  sells  a 
piece  of  land  he  transfers  his  right  to  a  series  of  annual  incomes 
which  may  be  greater  or  less  as  time  passes  by,  but  which  will 
probably  increase  as  the  years  go  by.  In  payment  for  this 
land  he  is  to  accept  another  income-bearer  which  may  yield  a 
larger  or  smaller  annual  income  as  the  years  go  by,  but  which 
will  probably  yield  a  smaller  income  in  the  future  than  at 
present.  This  circumstance  makes  it  impossible  to  do  more 
than  approximate  the  actual  present  value  of  a  piece  of  land. 

The  presence  of  so  many  uncertainties  makes  the  buying  of 
land  partake  more  or  less  of  the  character  of  speculation,  and 
during  times  of  prosperity  the  tendency  is  for  men  to  be  optimis- 
tic and  overestimate  the  probabiUties  of  a  rise  in  rents  or 
a  fall  in  the  rate  of  interest.  On  the  other  hand,  when  periods 
of  depression  come,  the  tendency  is  for  men  to  underestimate 
the  future  possibiUties.  As  a  result  of  this  psychological  ele- 
ment, the  tendency  is  for  the  price  of  land  to  rise  too  high  dur- 
ing periods  of  prosperity  and  to  sink  too  low  during  periods  of 
depression.  As  many  years  are  usually  required  for  one  of 
these  changes  from  undervaluation  to  overvaluation  to  take 
place,  land  does  not  lend  itself  so  readily  to  speculation  as  does 


THE  VALUE  OF  FARM  LAND  AND  EQUIPMENTS       209 

wheat,  for  example  ;  and  yet  the  man  with  plenty  of  funds  which 
are  available  at  the  right  time  may  win  large  profits  from  specula- 
tions in  land.  Speculation  if  indulged  in  at  the  proper  time 
may  keep  the  price  of  land  from  falling  so  low  as  it  might  other- 
wise do  in  times  of  depression,  and  also  from  rising  so  high  as  it 
otherwise  might  during  times  of  inflated  values.  This  is  true 
only  where  the  speculator  is  wise  enough  to  buy  when  prices 
are  too  low  and  to  sell  when  the  values  rise  too  high.  Unwise 
speculation  in  land  may  have  the  very  opposite  result. 

The  study  of  the  rise  and  fall  of  the  price  of  land  in  the  United 
States  seems  to  show  that  there  are  times  when  the  price  rises 
rapidly  for  a  few  years  and  then  remains  stationary  for  several 
years.  This  latter  period  is  usually  characterized  by  the  fact 
that  sales  of  land  are  relatively  few.  Land  is  generally  held  at 
the  prices  which  were  reached  during  the  period  of  rapid  sales, 
when  optimistic  views  of  the  future  forced  the  price  considerably 
beyond  the  present  capital  value.  If  sales  are  made  during  this 
dull  period  they  are  likely  to  be  at  a  price  appreciably  lower 
than  that  at  which  land  is  usually  held,  and  likely  to  be  a  forced 
sale.  The  price  of  land,  then,  may  be  illustrated  by  a  curve 
which  rises  during  one  period,  remains  on  the  same  level  or 
falls  during  a  succeeding  period,  and  then  rises  again.  When 
viewed  for  a  long  period  of  time,  the  general  rise  in  land  values 
is  evident,  but  the  temporary  fluctuations  are  very  important 
to  any  one  interested  in  buying  land. 

The  price  of  land  in  any  given  district  is  influenced  by  the 
number  and  character  of  the  men  who  desire  to  be  farmers  in 
that  district.  It  often  happens  that  competition  for  the  use  of 
land  is  keener  in  some  regions  than  in  others,  even  though  the 
land  be  as  fertile,  and  the  prices  of  agricultural  products  as 
high,  in  the  one  place  as  in  the  other.  Some  districts  produce 
more  high-grade  farmers  each  generation  than  do  other  districts, 
and  as  a  strong  motive  is  required  to  impel  the  surplus  of 
farmers  to  remove  to  another  district,  competition  in  the  over- 
populated  district  forces  the  rents  and  the  prices  which  are  paid 
for  land  higher  and  higher  until  they  are  appreciably  above  the 
level  of  those  which  are  paid  for  land  in  other  districts  which 


210  AGRICULTURAL  ECONOMICS 

are  capable  of  producing  crops  which  are  just  as  valuable  in 
terms  of  money. 

Again,  it  sometimes  happens  that  land  is  valued  for  the  social 
standing  which  accompanies  its  ownership,  as  well  as  for  the 
income  in  money  which  it  yields.  In  a  country  where  this  is 
true,  and  where,  at  the  same  time,  there  are  large  numbers  of 
persons  who  have  great  fortunes  and  who  are  very  desirous  of 
attaining  to  a  high  social  position,  the  prices  which  may  be 
paid  for  land  often  rise  far  beyond  what  could  be  paid  if  the 
series  of  annual  incomes  in  cash  were  the  only  factor  to  be  taken 
into  account. 

Of  two  pieces  of  land  which  will  rent  for  the  same  amount, 
that  in  one  district  may  sell  for  a  higher  price  than  that  in  an- 
other because  there  is  more  money  seeking  investment  in  the 
one  place  than  in  the  other.  A  man  of  wealth  will  usually 
rather  have  his  capital  invested  in  land  near  where  he  lives  than 
at  a  great  distance  where  he  cannot  so  readily  look  after  his 
property,  or  if  he  invests  in  land  at  a  greater  distance  he  will 
usually  expect  a  higher  rate  of  return  to  counteract  the  disad- 
vantages arising  from  the  distance. 

This  same  principle  of  capitaHzation  may  be  applied  to  other 
forms  of  income  bearers  as  well  as  to  land.  In  estimating  the 
value  of  a  given  machine,  the  farmer  may  think  of  the  amount 
of  service  he  is  to  get  out  of  the  machine  during  the  next  ten 
years,  let  us  say,  on  the  assumption  that  the  machine  will  be 
worn  out  in  that  time.  This  is  a  rather  difficult  process  be- 
cause the  deterioration  of  the  machine  and  perhaps,  also,  the 
invention  of  a  better  machine  to  do  the  same  work  will  result 
in  a  gradual  reduction  in  the  usefulness  of  the  machines ;  and 
yet,  if  he  is  to  invest  wisely  in  the  various  forms  of  equipment, 
the  farmer  should  attempt  to  estimate  the  value  of  the  series 
of  uses  which  may  reasonably  be  expected  to  be  gotten  from 
the  particular  instrument  of  production  during  the  time  which 
it  shall  be  at  all  serviceable,  and  then  find  the  present  value 
of  these  future  uses  by  discounting  them  "  at  a  rate  that  reflects 
the  prevailing  premium  on  the  present." 

This  capital  value  of  the  instrument  represents  the  maximum 


THE  VALUE  OF  FARM  LAND  AND  EQUIPMENTS      211 

price  which  the  farmer  can  afford  to  pay,  but  does  not,  of  course, 
necessarily  represent  the  market  price  of  the  instrument  of 
production.  The  market  price  may  be  greater  or  less  than  the 
capital  value  obtained  in  this  way,  for  the  instrument  of  pro- 
duction may  have  as  many  valuations  as  there  are  different 
grades  of  farmers  to  use  it  and  different  grades  of  uses  to  which 
it  may  be  put  by  a  given  farmer.  In  order  to  get  a  capital 
value  that  will  correspond  more  or  less  closely  to  the  market 
value  of  the  various  forms  of  capital-goods  it  will  be  necessary, 
therefore,  to  arrive  at  the  competitive  price  which  -wdll  be  paid 
for  the  use  of  a  given  equipment  during  the  series  of  years  of  its 
usefulness,  and  then  find  the  present  value  of  the  series  of  in- 
comes, in  the  same  way  as  has  been  done  in  the  case  of  land. 
But  since  it  is  not  common  in  this  country  to  let  horses,  tools, 
and  machinery  to  farmers  for  a  hire,  this  method  of  capitaliza- 
tion is  less  practical  to  the  farmer  when  appHed  to  equipments 
than  when  applied  to  land. 

The  cost  of  producing  the  machine  or  the  horse  is  an  important 
element  in  determining  the  price  which  must  be  paid  for  it  in 
order  that  it  may  be  produced.  On  the  other  hand,  the  use- 
fulness of  the  machine  or  the  horse  to  the  farmer  forms  the 
basis  for  his  estimating  whether  or  not  he  can  better  afford 
to  pay  the  market  price  or  do  without  them.  It  may  be  true 
even  that  the  capital  value  of  the  instrument,  when  calculated 
on  the  basis  of  its  usefulness  to  a  given  farmer,  may  be  greater 
than  its  market  value  and  yet  it  might  be  unprofitable  for  the 
farmer  to  buy  the  particular  horse  or  machine,  because  other 
means  of  securing  the  same  end  might  prove  more  profitable. 

The  theory  of  capitalization  is  especially  useful  in  the  con- 
sideration of  the  value  of  farm  land  because  the  value  of  a  given 
piece  of  land  has  no  particular  relation  to  the  cost  of  bringing 
such  land  under  cultivation.  The  income  received  by  the 
landlord  is  largely  a  surplus  which  is  credited  to  land  becaust 
it  is  scarce,  rather  than  because  it  costs  any  definite  amoune 
to  improve  the  land.  Land  is  also  much  more  permanent  in 
character  than  is  equipment,  and  for  this  reason,  also,  it  lends 
itself  with  more  facility  to  the  above  method  of  capitalization. 


212  AGRICULTURAL  ECONOMICS 

The  fear  that  the  price  of  land  has  been  rising  too  rapidly 
and  that  present  prices  are  highly  speculative  is  rapidly  gaining 
in  its  hold  upon  the  minds  of  farmers.  It  can  be  shown  that  a 
rise  in  the  price  of  land  has  been  warranted,  but  the  present 
situation  deserves  careful  consideration  and  conservative 
action.  The  young  farmer  had  better  continue  as  a  tenant  a 
while  longer  unless  he  has  at  least  half  the  purchase  price  in 
addition  to  funds  enough  to  equip  and  operate  the  farm. 

The  price  per  acre  of  farm  land  in  the  United  States  doubled 
during  the  decade  from  1900  to  1910.  There  is  no  record  of 
an  equally  great  rise  in  the  price  of  farm  land  in  any  other  period 
in  the  history  of  our  country.  From  1850  to  i860,  after  the 
mid-century  gold  discoveries,  the  price  per  acre  of  all  farms 
increased  46.5  per  cent;  from  i860  to  1870,  11. 8  per  cent; 
1870  to  1880,  4.2  per  cent ;  1880  to  1890,  12  per  cent ;  whereas 
the  average  price  of  farm'  land  in  the  United  States  fell  7.1 
per  cent  during  the  decade  from  1890  to  1900,  owing  largely  to 
the  depression  in  the  West.  The  unparalleled  rise  in  the  prices 
of  farm  lands  in  recent  years  calls  for  some  explanation.  Where 
the  increase  in  the  price  of  land  is  due  to  a  rise  in  the  returns 
from  investments  in  land,  this  increase  is  normal  and  to  be 
expected.  On  the  other  hand,  to  the  extent  that  the  price  of 
land  rises  without  a  corresponding  rise  in  the  income  from  land 
or  a  general  fall  in  interest  rates,  the  farmer  and  the  nation  have 
something  to  fear. 

As  farm  land  values  should  depend  upon  rents,  so  farm  rents 
are  dependent  upon  the  prices  of  farm  products.  The  value 
per  acre  of  farm  products  increased  66.8  per  cent  during  the 
same  period  that  the  price  of  land  doubled.  If  rents  increased 
in  proportion  to  the  prices  of  products,  this  would  yet  leave  a 
third  of  the  increase  in  the  price  to  be  explained  in  terms  of 
other  forces. 

An  increase  in  the  share  of  the  proceeds  of  the  farm  secured 
by  the  landlord  would  normally  result  in  a  more  rapid  rise  in  the 
price  of  land  than  in  the  price  of  crops.  There  has  been  a  rise 
in  share  rents  in  parts  of  the  north  central  states.  Some  land 
which  rented  for  a  third  came  to  rent  for  two-fifths.    Some  land 


THE  VALUE  OF  FARM  LAND  AND  EQUIPMENTS      213 

which  rented  for  two-fifths  is  rented  for  one-half.  Unfortu- 
nately, the  census  gives  no  measure  of  the  increase  in  rents. 

The  cash  income  from  land  may  remain  the  same  and  a 
legitimate  rise  in  the  price  of  land  result  from  a  fall  in  the 
interest  rate  on  safe  loans.  It  is  doubtful  if  this  has  been  an 
important  influence  in  the  recent  rising  prices  of  land. 

BeUef  in  future  increase  in  the  returns  from  land  may  be 
the  occasion  of  a  rise  in  prices  beyond  the  amount  on  which 
the  rent  will  at  present  pay  interest.  This  is  the  speculative 
factor  in  the  present  price  of  land.  Just  what  share  of  present 
prices  are  speculative  no  one  can  tell.  Much  which  was  specu- 
lative investment  prior  to  war  prices  appears  no  longer  to  be 
speculative,  because  the  return  which  goes  to  land  as  share 
rent  pays  a  satisfactory  rate  of  interest  on  the  present  price 
of  the  land.  The  danger  is  that  the  prices  of  products  will 
fall  and  leave  the  land  values  on  a  speculative  level  again. 

The  paying  of  a  price  for  farm  land  beyond  its  worth  as  a 
basis  of  farming  operations  is  not  so  serious  a  matter  for  the 
purchaser  who  is  able  to  pay  cash  for  the  land.  If  he  has  paid 
too  much  and  the  price  does  not  rise,  or  having  risen  falls  again, 
he  is  poorer  but  not  broken.  With  the  man  who  buys  on  a 
land  contract  with  only  20  per  cent  of  the  purchase  money  paid 
down,  the  case  is  different.  In  recent  years  many  farms  have 
been  purchased  at  a  high  price  and  with  only  a  small  proportion 
of  the  purchase  money  paid  down.  The  outcome  has  usually 
been  good  because  of  the  ability  of  the  purchasers  and  the  trend 
of  prices.  If  debt  paying  is  favored  by  rising  prices  of  farm 
products,  most  farmers  will  pull  through  safely,  even  when 
land  prices  are  above  the  productive  value  of  the  land.  In 
case  of  stationary  prices,  all  have  a  hard  time,  but  the  more 
able  will  succeed  in  spite  of  the  burden  of  excessive  principal 
and  interest.  If  an  era  of  falling  prices  should  follow,  hope 
would  soon  be  crushed  and  the  failure  of  all  but  the  very  ablest 
would  be  all  but  certain.  It  is  unwise  for  a  farmer  to  invest 
a  large  share  of  his  savings  in  a  non-interest  bearing  speculative 
margin  in  the  price  of  land. 

There  are  many  explanations  of  the  extraordinary  rise  in 


214  AGRICULTURAL  ECONOMICS 

prices  in  the  first  decade  of  the  twentieth  century.  It  followed 
a  period  of  depression.  It  was  the  period  when  people  became 
conscious  that  the  land  supply  is  limited,  and  that  the  good, 
free  land  has  been  taken  up.  It  was  a  period  of  great  increase 
in  the  supply  of  gold  and  also  a  period  of  great  increase  in  the 
use  of  bank  checks  in  the  place  of  gold  certificates,  —  this  is 
thought  to  be  suflacient  to  account  for  half  the  rise  in  the  prices 
of  farm  products.  The  ease  with  which  old  debts  were  paid  with 
cheaper  money  has  made  people  hopeful  in  obligating  them- 
selves for  the  payment  of  larger  debts. 

These  are  some  of  the  most  important  principles  and  con- 
ditions which  should  be  kept  in  mind  in  the  consideration  of 
the  values  of  farm  land,  and  of  farm  live  stock  and  equipment. 
The  prospective  buyer  of  land  will  do  well  to  bear  in  mind  the 
advice  of  Cato,  a  Roman  agricultural  writer,  who  is  quoted  by 
Pliny  ^  as  saying :  "  Do  not  be  too  eager  in  buying  a  farm.  In 
rural  operations  never  be  sparing  of  your  trouble,  and,  above 
all,  when  you  are  purchasing  land.  A  bad  bargain  is  always 
a  ground  for  repentance." 

1  Pliny's  "Natural  History,"  Book  XVIII,  Chapter  VI;  "Bohn'a  Library"  edi- 
tion, Vol.  IV,  p.  II. 


CHAPTER  XIX 
THE  FARMER'S   MEANS  OF  ACQUIRING  LAND 

Free  land.  Hitherto  the  progress  of  American  agriculture 
has  been  powerfully  influenced  by  the  presence  of  vast  areas 
of  governme'nt  lands  which  were  easily  secured,  easily  brought 
into  cultivation,  and  which  gave  large  returns  upon  invest- 
ments. The  presence  of  these  vast  areas  of  cheap  land  of  great 
fertility  in  a  country  where  labor  was  scarce  led  to  the  inven- 
tion of  many  labor-saving  devices  until  America  became  noted 
the  world  over  for  her  agricultural  machinery ;  but,  above  all, 
the  presence  of  free  land  has  made  oppressions  by  landlords 
impossible.  The  farmers  have  been  able  to  take  up  valuable 
government  lands.  This  means  of  acquiring  land  ownership 
has  been  very  important  from  the  time  the  first  settlers  landed 
in  the  New  World  until  the  present  time.  When,  in  the  earUer 
days,  land  became  scarce  in  Massachusetts,  emigration  to  Con- 
necticut set  in,  and  when  the  best  lands  in  both  of  these  colonies 
were  occupied,  there  still  remained  unoccupied  good  land  in 
New  York.  When  the  small  farmers  of  Virginia  were  crowded 
out  by  the  great  planters,  they  found  unoccupied  lands  in  North 
Carolina,  and  later  they  followed  Boone  into  the  wilderness  of 
Kentucky.  In  time  the  occupation  of  the  Mississippi  valley 
was  completed,  and  in  more  recent  years,  since  the  great  plains 
have  been  made  easily  accessible  by  railways,  the  settlement  of 
new  land  has  gone  on  at  an  exceedingly  rapid  rate. 

That  the  acquisition  of  landownership  was  an  easy  task  for 
the  American  farmer  of  the  earUer  days  is  indicated  by  the 
following  quotation  taken  from  a  description  of  the  settlements 
along  the  Monongahela  in  1772  and  1773  :  "Land  was  the 
object  which  invited  the  greater  number  of  these  people  to 
cross  the  mountains,  for  as  the  saying  then  was,  '  It  was  to  be 

215 


2l6  AGRICULTURAL  ECONOMICS 

had  here  for  taking  up  ' ;  that  is,  building  a  cabin  and  raising 
a  crop  of  grain,  however  small,  of  any  kind,  entitled  the  occupant 
to  four  hundred  acres  of  land,  and  a  preemption  right  to  one 
thousand  acres  more  adjoining,  to  be  secured  by  a  land  office 
warrant."  ^ 

In  1790  Alexander  Hamilton  proposed  a  plan  for  the  dis- 
position of  the  public  lands  which  reads  as  follows :  "In  the 
formation  of  a  plan  for  the  disposition  of  the  vacant  lands  of 
the  United  States  there  appear  to  be  two  leading  objects  of 
consideration :  one,  the  facility  of  advantageous  sales,  accord- 
ing to  the  probable  course  of  purchases ;  the  other  the  accom- 
modation of  individuals  now  inhabiting  the  western  country, 
or  who  may  hereafter  emigrate  thither.  The  former,  as  an 
operation  of  finance,  claims  primary  attention ;  the  latter  is 
important,  as  it  relates  to  the  satisfaction  of  the  inhabitants  of 
the  western  country.  It  is  desirable,  and  does  not  appear  im- 
practicable, to  conciliate  both.  Purchasers  may  be  contem- 
plated in  three  classes :  moneyed  individuals  and  companies  who 
will  buy  to  sell  again ;  associations  of  persons  who  intend  to 
make  settlements  themselves;  single  persons  or  famihes, 
now  resident  in  the  western  country  or  who  may  emigrate 
thither  hereafter.  The  two  first  will  be  frequently  blended, 
and  will  always  want  considerable  tracts.  The  last  will  generally 
purchase  small  quantities.  Hence  a  plan  for  the  sale  of  the 
western  lands,  while  it  may  have  due  regard  for  the  last,  should 
be  calcuated  to  obtain  all  the  advantages  which  may  be  derived 
from  the  two  first  classes."  ^ 

The  government  was  slow  in  formulating  the  plan  which 
finally  became  most  significant  in  the  conversion  of  the  public 
domain  into  a  nation  of  farms.  The  American  statesmen  of 
the  eighteenth  century  looked  upon  the  western  lands  "  as 
an  asset  to  be  cashed  at  once  for  payment  of  current  expenses 
of  government  and  extinguishment  of  the  national  debt."  * 
This  desire  to  convert  the  public  domain  into  cash  led  to  the 

1  The  Settlement  of  the  Western  Country,  by  Reverend  Joseph  Doddridge,  in 
Hart's  "American  History  Told  by  Contemporaries,"  Vol.  II,  p.  387. 

*  See  "The  Pubhc  Domain,"  by  Donaldson,  p.  198.  '  Ibid.,  p.  ig6. 


THE  FARMER'S  MEANS  OF  ACQUIRING  LAND        217 

sale  of  land  in  large  tracts.  Under  the  ordinance  of  May  20, 
1785,  surveyed  lands  were  offered  in  lots  as  large  as  a  whole 
township  of  36  sections  of  640  acres  each,  for  not  less  than  $1 
per  acre.^  Under  an  Act  passed  May  18,  1796,  which  provided 
for  the  survey  of  certain  lands  in  the  present  state  of  Ohio, 
surveyed  lands  were  to  be  offered  at  public  sale  in  sections  of 
640  acres,  and  in  lots  of  eight  such  sections  each.  The  minimum 
price  was  then  fixed  at  $2  per  acre.^  Prior  to  May  10,  1800, 
1,484,047  acres  of  land  had  been  sold  from  the  public  domain 
for  the  benefit  of  the  United  States.  From  these  sales  was 
realized  $1,201,725.68.^  '] 

Under  an  Act  of  May  10, 1800,  land  offices  were  opened  in  the 
Northwest  Territory.  The  minimum  price  was  kept  at  $2 
per  acre.  Lands  were  offered  for  three  weeks  at  public  sale  in 
sections  and  half  sections,  and  what  remained  at  the  end  of 
this  period  was  to  be  sold  privately,  as  wanted,  at  the  minimum 
price.  During  the  next  twenty  years  the  net  sales  of  govern- 
ment lands  were  13,642,536  acres,  from  which  the  sum  of 
$27,900,379.29  was  realized.^  In  1820  the  minimum  price  of 
land  was  reduced  to  $1.25  per  acre.  The  revenue  idea  was 
gradually  abandoned  and  the  settlement  of  the  western  country 
came  to  be  looked  upon  as  the  principal  end  in  view  in  the  dis- 
position of  the  public  domain. 

The  preemption  system,  which  gave  the  preference  to  actual 
settlers  in  the  sales  of  land  at  the  minimum  price,  was  em- 
bodied in  sixteen  special  Acts  between  1801  and  1841.  At  the 
latter  date  a  general  Act  was  passed  which,  with  minor  changes, 
remained  in  force  until  1891.  The  actual  settlers  were  per- 
mitted to  enter  upon  tracts  of  land  not  larger  than  160  acres 
nor  less  than  40  acres  before  such  lands  had  been  offered  at 
public  sale.  The  requirements  were  that  the  person  should 
reside  in  a  dwelling  upon  the  tract,  improve  and  cultivate  a  part 
of  the  land,  and  after  a  limited  period  pay  $1.25  per  acre. 

"  The  preemption  system,"  says  Donaldson,^  "  arose  from 
the  necessities  of  settlers,  and  through  a  series  of  more  than  57 

>  See  "The  Public  Domain,"  by  Donaldson,   p.  1Q7.  *  Ibid.,  p.  200. 

» Ibid.,  p.  201.  *  Ibid.,  p.  203.  '  Ibid.,  p.  215. 


2l8  AGRICULTURAL  ECONOMICS 

years  of  experience  in  attempts  to  sell  or  otherwise  dispose  of 
the  public  lands.  The  early  idea  of  sales  for  revenue  was 
abandoned  and  a  plan  of  disposition  for  homes  was  substituted. 
The  preemption  system  was  the  result  of  law,  experience,  execu- 
tive orders,  departmental  rulings,  and  judicial  construction. 
It  has  been  many-phased,  and  was  applied  by  special  acts  to 
special  localities,  with  peculiar  or  additional  features,  but  it 
has  always  and  to  this  day  [1880]  contains  the  germ  of  actual 
settlement,  under  which  thousands  of  homes  have  been  made 
and  lands  made  productive,  yielding  a  profit  in  crops  to  the 
farmer  and  increasing  the  resources  of  the  nation." 

The  Homestead  Act  of  1862  was  the  final  step  in  the  direc- 
tion of  free  land  for  actual  settlers.  This  law  was  the  result, 
in  part  at  least,  of  the  agitations  of  the  Free  Soil  Democrats. 
They  claimed  "  that  the  public  lands  of  the  United  States  be- 
long to  the  people,  and  should  not  be  sold  to  individuals,  nor 
granted  to  corporations,  but  should  be  held  as  a  sacred  trust 
for  the  benefit  of  the  people,  and  should  be  granted  in  limited 
quantities,  free  of  cost,  to  landless  settlers."  ^ 

The  homestead  law  enables  the  landless  farmer  to  secure 
a  quarter  section,  160  acres,  of  land  and  acquire  a  title  to  the 
same  by  maintaining  residence  thereupon  and  improving  and 
cultivating  the  land  for  the  continuous  period  of  five  years.^ 

"  The  homestead  act,"  says  Donaldson,^  writing  in  1880, 
"  is  now  the  approved  and  preferred  method  of  acquiring  title 
to  the  public  lands.  It  has  stood  the  test  of  eighteen  years, 
and  was  the  outgrowth  of  a  system  extending  through  nearly 
eighty  years,  and  now,  within  the  circle  of  a  hundred  years 
since  the  United  States  acquired  the  first  of  her  public  lands, 
the  homestead  act  stands  as  the  concentrated  wisdom  of  legis- 
lation for  settlement  of  the  public  lands.  It  protects  the  gov- 
ernment, it  fills  the  states  with  homes,  it  builds  up  communities, 
and  lessens  the  chances  of  social  and  civil  disorder  by  giving 

1  See  "The  Public  Domain,"  by  Donaldson,  p.  332. 

*  Circular  from  the  General  Land  OflSce  showing  the  manner  of  proceeding  to 
obtain  title  to  public  lands,  1904,  p.  11. 

'  See  "The  Public  Domain,"  by  Donaldson,  p.  3S0>   -. 


THE   FARMER'S  MEANS  OF  ACQUIRING  LAND        219 

ownership  of  the  soil,  in  small  tracts,  to'the  occupants  thereof. 
It  was  copied  from  no  other  nation's  system.  It  was  originally 
American,  and  remains  a  monument  to  its  originators." 

From  1873  to  1891  a  Timber  Culture  Act  was  in  force.  This 
act,  as  first  passed,  enabled  "  any  person  "  to  obtain  not  more 
than  160  acres  of  land  by  planting  40  acres  of  timber  and  properly 
caring  for  the  same  for  ten  years.  The  number  of  acres  of 
timber  required  was  finally  reduced  to  10,  and  the  period  of 
cultivation  to  eight  years.  The  privilege  came  to  be  restricted, 
however,  to  persons  twenty-one  years  of  age,  heads  of  families, 
citizens  of  the  United  States,  or  one  who  has  filed  his  declara- 
tion of  intention  to  become  such.  The  law  was  a  failure  from 
the  standpoint  of  timber  culture,  but  in  all  44,229,950  acres 
of  land  were  entered  by  this  method. 

!  The  total  area  included  in  farms  was  more  than  doubled 
between  i860  and  1900.  The  acreage  in  farms  was  407,212,538 
in  i860,  and  in  1900  it  was  838,591,774.  The  importance  of 
free  land  in  this  increase  in  the  total  area  of  land  in  farms  is 
shown  by  the  fact  that  between  January  i,  1863,  and  June  30, 
1900,  188,149,032  acres  of  land  were  entered  under  the  home- 
stead laws.  It  is  estimated  that  public  lands  had  been  dis- 
posed of  by  the  government  prior  to  June  30,  18(60,  to  the  extent 
of  417,587,322  acres.^ 

The  free  distribution  of  farms  by  the  Government  practically 
no  longer  exists.  Although  over  one-tenth  of  the  total  land 
area  of  the  United  States,  exclusive  of  Alaska  and  the  insular 
possessions,  remains  unappropriated  and  unreserved  (222,448,- 
225  acres  in  1918  out  of  the  total  area  of  1,900,947,200  acres), 
this  land  is  nearly  all  desert  or  semi-desert  and  unsuitable  for 
the  production  of  crops.  It  is  located  principally  in  Arizona, 
California,  Colorado,  Idaho,  Montana,  Nevada,  New  Mexico, 
Oregon,  Utah,  and  Wyoming,  and  most  of  it  is  used  for  grazing 
sheep  and  cattle  particularly,  during  the  winter  and  spring 

1  Donaldson  ("Public  Domain,"  p.  519)  says:  "The  disposition  of  the  public 
domain  from  its  origin  to  June  30,  1883,  is  estimated  at  about  620,000,000  acres." 
From  this  number  has  been  subtracted  the  sum  of  the  amounts  annually  disposed 
of  each  year  from  June  30,  i860,  to  June  30,  1883,  or  202,412,322  acres. 


220  AGRICULTURAL  ECONOMICS 

months  when  the  vegetation  is  more  abundant.  A  large 
acreage  is  required  to  support  a  family  even  in  a  modest 
pioneer  manner,  as  is  indicated  by  the  fact  that  under  the 
Grazing  Homestead  Act,  which  allows  only  640  acres  to  an 
applicant,  but  20,000,000  acres  had  been  designated  by  June  30, 
1919,  divided  between  nearly  33,000  applicants.  Practically 
all  these  grazing  homesteads  which  offer  the  slightest  possi- 
bility of  success  have  been  applied  for.  When  an  Indian 
reservation  is  now  thrown  open  to  settlers  there  are  many 
applicants  for  every  desirable  piece  of  land.  In  the  summer 
of  1904  there  were  in  one  case  106,308  persons  registered  with 
the  hope  of  drawing  farms  where  there  were  but  2412  pieces  of 
land  of  160  acres  each  for  distribution. 

Land  settlement.  While  free  land,  useful  for  agricultural 
purposes,  is  scarce  and  no  longer  plays  an  important  part  in 
the  maintenance  of  landownership  on  the  part  of  farmers  in 
the  United  States,  there  is  much  unoccupied  land  in  the  old 
forest  regions  which  is  now  on  the  market  at  a  low  price. 
Whether  the  price  is  relatively  low  when  compared  with  the 
old  prairie  farms  may  be  doubtful,  but  the  absolute  figures  look 
small  to  the  farmer  who  has  worked  $200  land  as  a  tenant  until 
his  hair  is  gray  and  who  is  still  unable  to  make  the  first  payment 
on  the  farm  he  occupies.  The  man  in  this  position  takes  a 
trip  to  the  cut-over  country  and  finds  an  eighty-acre  farm  with 
thirty  acres  cleared  and  the  remainder  covered  with  second- 
growth,  interspersed  with  occasional  open  grass  spots  connected 
by  cow-paths.  At  first  blush,  before  he  has  any  idea  of  the 
cost  of  clearing  the  remaining  fifty  acres  of  brush  land  except 
the  opinion  given  by  the  land  agent,  and  without  any  knowledge 
of  what  a  year's  labor  will  yield  on  this  farm,  $50  or  $60  an 
acre  sounds  cheap.  It  is  within  his  means.  The  desire  for  a 
home  of  his  own  after  many  years  of  tenancy  turns  the  balance 
quickly  in  favor  of  buying.  Thus  it  is  that  a  good  deal  of  the 
savings  of  tenant  farmers  occupying  high-priced  land  is  used 
in  getting  homes  on  the  lower-priced  and  less  valuable  land. 
While  this  tends  to  emphasize  tenancy  in  the  regions  of  high 
land  values  it  provides  the  funds  for  developing  new  lands  and 


THE  FARMER'S  MEANS  OF  ACQUIRING  LAND        221 

helps  to  maintain  the  percentage  of  landownership  in  the  United 
States  as  a  whole. 

That  this  movement  to  cheaper  lands  in  order  to  acquire 
landownership  may  have  the  best  results  for  the  farmers  and 
for  the  country  as  a  whole,  the  movement  must  be  guided  by 
people  who  know  the  possibilities  of  the  land  and  who  have  no 
personal  interest  in  any  particular  piece  or  kind  of  land.  The 
dishonest  real  estate  agent  does  much  to  retard  this  movement 
by  levying  a  heavy  tax  upon  the  farmers  who  are  so  unfortunate 
as  to  fall  into  his  hands.  The  honest,  intelligent  real  estate 
agent  who  takes  a  professional  interest  in  the  upbuilding  of  his 
community  is  rendering  a  valuable  service.  Several  states, 
through  their  immigration  bureaus,  are  doing  much  to  encourage 
the  settlement  of  their  sparsely  settled  regions  by  carrying  on 
an  educational  campaign  among  those  people  who  wish  to 
move  to  newer  and  cheaper  lands.  Much  more  work  needs 
to  be  done  by  these  states  in  the  way  of  estabhshing  well- 
worked-out  plans  for  settling  the  land  on  a  basis  profitable  to 
the  settler  and  to  the  state  as  a  whole.  This  will  not  only  in- 
crease the  wealth  of  the  country  but  facilitate  the  maintenance 
of  the  landowning  farmer  as  the  dominant  class  in  American 
agriculture. 

Gift  and  inheritance.  A  vast  amount  of  wealth  passes  on 
from  generation  to  generation  by  gift  and  inheritance.  Hence 
it  is  not  necessary,  in  order  to  maintain  the  class  of  landowning 
farmers  in  a  country  where  this  class  is  already  established, 
that  each  succeeding  generation  of  farmers  should  save  from  the 
profits  of  their  industry  sufficient  wealth  to  purchase  their 
farms,  and  to  hand  this  accumulated  wealth  over  to  the  preced- 
ing generation  of  landowners.  This  would  be  necessary, 
however,  in  order  to  reestablish  a  class  of  landowning  farmers 
in  one  generation  in  a  country  where  landlordism  has  become 
universal.  In  England,  where  most  of  the  land  is  owned  by  a 
comparatively  small  number  of  landlords,  the  estates  are  handed 
down  from  generation  to  generation  and  thus  remain  the 
property  of  the  landlord  class ;  and  in  that  country  it  is  un- 
usual indeed  for  a  tenant  farmer  to  undertake   to  purchase 


222  AGRICULTURAL  ECONOMICS 

a  farm.  In  Germany,  where  peasant  proprietorship  is  the 
rule,  the  farms  are  handed  down  from  father  to  son  by  in- 
heritance, and  thus  the  property  is  kept  in  the  hands  of  the 
tillers  of  the  soil.  The  conditions  with  respect  to  inherited 
wealth  are,  therefore,  of  great  importance  in  determining  the 
status  of  farmers  with  respect  to  landownership. 

In  the  United  States  it  is  a  matter  of  common  observation 
that  farmers  who  are  able  to  do  so,  assist  their  sons  in 
buying  farms.  This  assistance  may  be  relatively  very  great 
in  the  case  of  a  wealthy  farmer  who  has  a  small  family;  and 
again  it  may  be  very  small  in  the  case  of  a  farmer  in  moderate 
circumstances,  who  has  a  large  number  of  children  among  whom 
he  wishes  to  distribute  his  assistance.  Often  the  home  farm  is 
greatly  enlarged  by  purchasing  a  "  forty  "  here  and  an  "  eighty  " 
there  while  the  boys  are  growing  to  manhood,  and  then  parceled 
out  as  the  young  men  wish  to  establish  homes  for  themselves. 
Again,  when  the  parents  are  gone,  the  remainder  of  their  ac- 
cumulated wealth  passes  by  inheritance  to  their  sons  and 
daughters  and  helps  very  greatly  in  the  enlargement  of 
their  farms  as  their  growing  families  make  larger  farms  de- 
sirable. 

The  movement  of  population  from  country  to  city,  which 
has  been  so  great  in  recent  years  in  this  country,  results  in  the 
transfer  of  a  vast  amount  of  wealth  from  the  agricultural  in- 
dustry, which  must  be  replaced  from  some  source  if  the  wealth 
of  farmers  is  not  to  decline.  The  general  principle  may  be 
thus  stated :  The  greater  the  amount  of  land  and  other  forms  of 
wealth  acquired  by  one  generation  and  transmitted  to  the  farmers 
of  the  next,  and  the  more  evenly  this  wealth  is  distributed,  the 
greater  the  ease  with  which  the  ownership  of  land  may  be  acquired 
by  the  succeeding  generations  of  farmers;  but  the  larger  the  farm 
families  of  a  given  community,  and  the  larger  the  percentage  of 
each  succeeding  generation  who  seek  a  livelihood  in  other  indus- 
tries, the  greater  the  amount  of  wealth  which  will  be  drawn  from 
agriculture  into  other  industries  by  gift  and  inheritance,  and  the 
smaller  the  part  which  inherited  wealth  will  play  in  the  acquistion 
of  landownership. 


THE  FARMER'S  MEANS  OF  ACQUIRING  LAND        223 

The  number  of  persons  employed  in  the  various  other  occupa- 
tions has  increased  much  more  rapidly  than  has  the  number 
engaged  in  agriculture.  This  is  shown  by  the  following  table, 
which  gives  the  proportion,  of  those  engaged  in  all  gainful 
occupations,  which  were  employed  in  "  agricultural  pursuits."^ 

TABLE   XIV 


Date 

Percentage  Engaged  in  Agriculture 

1820 

87.1 
77-S 
47-S 
44.4 

39-2 
35-7 
32-9 

1840   ....   

1870 

1880 

1890 

IQOO 

IQIO 

Perhaps  the  most  important  explanation  of  this  more  rapid 
increase  in  the  percentage  of  those  engaged  in  other  occupations 
than  agriculture,  is  the  transfer  of  a  share  of  the  agricultural 
population  to  the  other  industries.  This  has  often  been  spoken 
of  as  the  movement  from  the  country  to  the  city.  Men  who 
have  long  been  farmers  sometimes  move  to  the  cities  and  enter 
other  occupations,  but  what  is  more  significant  than  this  is  the 
movement  of  the  farm  boys  from  country  to  city.  A  large 
percentage  of  the  boys  who  are  brought  up  in  the  country  are 
educated  and  sent  into  the  city,  where  they  enter  occupations  of 
every  description.  A  large  percentage  of  the  men  who  control 
the  industries  of  cities  to-day  were  one-time  farm  boys. 

This  movement  from  country  to  city  was  especially  rapid 
during  the  seventies  and  eighties  for  two  reasons :  First,  agri- 
cultural methods  were  transformed  by  the  introduction  of  labor- 
saving  machinery,  until  a  much  smaller  percentage  of  the  total 
working  population  was  required  to  produce  the  same  supply 
per  capita  of  food  stuffs  and   raw   materials.     Second,   the 

*  Twelfth  Census  of  the  United  States,  1900,  Special  Reports,  Occupations, 

pp.  XXX,  I. 


224  AGRICULTURAL  ECONOMICS 

manufacturing  industries  have  been  developing  rapidly  during 
the  same  period,  giving  opportunity  for  a  share  of  the  increasing 
farm  population  to  find  remunerative  employment  in  the  in- 
dustries of  the  cities.  To  quote  Dr.  A.  C.  True,  "  Between 
1870  and  1890,  speaking  relatively  and  in  round  numbers,  two 
million  men  gave  up  farming  and  went  to  join  the  great  army  of 
toilers  in  cm*  cities.  Taking  their  families  into  account,  six 
million  people  from  the  farm  were  added  to  the  population  of  the 
town.  .  .  .  Men  leave  the  farms  because  they  are  not  needed 
there.  The  introduction  of  labor-saving  machinery  and  rapid 
transportation  has  produced  the  same  result  in  agriculture  as  in 
manufactures.  A  smaller  number  of  men  working  in  our  field 
turns  out  a  much  greater  product  than  the  greater  number  of 
laborers  could  possibly  secure  in  olden  times,  and  the  producers 
of  all  lands  are  easily  carried  where  they  are  needed.  .  ,  . 
Within  the  past  twenty-five  years,  invention  has  gained  the 
mastery  in  agriculture  as  in  other  arts.  The  brain  of  man  has 
triumphed  over  his  hand  here  as  elsewhere."  ^ 

If  only  the  poor  moved  from  country  to  city,  the  total  wealth 
of  the  country  would  be  affected  but  little  by  this  movement  of 
population.  But  the  rich  farmers  are  quite  as  apt  to  move  to  the 
cities  as  are  the  poor  ones,  in  fact  they  are  perhaps  more  Ukely 
to  do  so,  for  they  are  in  a  position  to  live  from  the  rent  of  their 
farms,  as  many  retired  farmers  are  doing  in  nearly  every  town 
of  the  country.  The  sons  of  the  well-to-do  farmers  are  more 
likely  to  receive  an  education  and  to  be  attracted  to  other 
pursuits  than  are  the  sons  of  poor  farmers ;  on  the  other  hand,  it 
may  be  true  in  many  cases  that  the  son  of  a  poor  farmer  would 
be  more  likely  to  seek  employment  in  the  city  because  his 
chances  of  getting  a  start  in  the  country  are  not  so  good  as  those 
of  the  young  man  with  a  well-to-do  father  to  aid  him. 

This  stream  of  population  is  carrying  a  vast  amount  of  wealth 
from  country  to  city  every  year.  This  movement  of  wealth 
from  country  to  city  has  rightly  been  given  as  one  cause  of  an 
increase  in  the  percentage  of  tenancy,  for  it  transfers  to  the 
city  the  owners  of  many  farms,  and  these  farms  are  cultivated 

1  A.  C.  True,  "The  Arena,"  Vol.  XVII,  pp.  538-539- 


THE  FARMER'S  MEANS  OF  ACQUIRING  LAND        225 

by  tenants  until  some  farmer  is  able  to  acquire  its  ownership  by 
transferring  to  the  city  owner  an  equivalent  amount  of  wealth. 

Thus  while  gift  and  inheritance  are  economic  conditions  of 
great  importance  in  determining  the  status  of  farmers  with 
respect  to  landownership,  and  make  any  rapid  change  in  their 
status  in  this  regard  impossible,  some  other  means  of  accumu- 
lating wealth  must  be  available  if  the  present  percentage  of  land- 
owning farmers  is  to  be  maintained.  This  leads  to  the  investi- 
gation of  savings  in  agriculture  as  a  means  of  acquiring  land- 
ownership. 

Savings.  The  process  of  saving  from  the  earnings  of  many 
years  and  making  a  purchase  is  a  means  of  acquiring  land- 
ownership  which  is  of  especial  significance  in  the  consideration 
of  the  conditions  which  make  it  possible  for  tenant  farmers 
to  become  landowners.  The  majority  of  the  tenants  are  able 
to  save  from  their  earnings,  because  their  net  returns  are  more 
than  enough  to  cover  the  expenses  of  living.  When  long  periods 
of  time  are  taken  into  consideration,  the  prices  of  agricultural 
products  tend  to  be  such  that  the  total  product  of  the  least 
capable  farmer  who  can  remain  permanently  in  the  business  will 
equal  his  cost  of  living  and  all  other  annual  expenditures, 
including  rent  and  normal  returns  on  permanent  investments. 
This  is  true  partly  because  long-time-average  prices  are  a  most 
important  factor  in  determining  the  degree  of  efficiency  which  is 
necessary  for  making  a  living  by  farming,  and  all  who  do  not 
prove  themselves  efficient  to  that  degree  must  leave  agriculture 
to  those  who  are  more  capable ;  again,  it  is  true  partly  because 
the  long-time-average  price  must  be  such  as  will  encourage  the 
production  of  sufficient  produce  to  supply  the  effective  demands 
of  the  people,  and  the  least  capable  farmer  who  is  required  to  pro- 
duce this  supply  must  receive  prices  which  will  enable  him  to 
live  in  accordance  with  his  idea  of  a  living,  to  pay  rent,  wages 
(unless  he  and  his  family  do  all  the  work,  in  which  case  this 
item  is  included  in  a  living),  wear  and  tear  on  machinery,  and 
normal  returns  on  permanent  investments. 

It  is  true,  certainly,  that,  at  any  given  time,  there  are  those 
who  are  producing  at  a  loss,  others  who  are  just  able  to  make 

Q 


226  AGRICULTURAL  ECONOMICS 

both  ends  meet,  and  still  others  —  and  ordinarily  this  class 
includes  the  vast  majority  —  who  are  able  to  make  an  extra 
profit  because  of  their  superior  ability.^ 

This  differential  gain,  or  profit  due  to  superior  ability,  is  the 
condition  which,  even  where  gift  and  inherited  wealth  are 
insignificant,  makes  it  possible  for  farmers  to  accumulate  wealth 
and  to  become  the  owners  of  farms.  It  is  true,  certainly, 
that  the  more  efficient  may  live  much  better  than  the  least 
capable,  or  marginal  farmers,  and  thus  the  habits  of  life  may 
reduce  the  power  of  the  more  efficient  farmers  to  save  from  their 
profits.  But  the  condition  which  gives  rise  to  this  differential 
gain  certainly  makes  it  possible  for  the  more  efficient  tenant 
farmers  to  buy  land. 

The  greater  the  number  of  those  who  have  gained  a  degree 
of  efficiency  above  that  of  the  marginal  farmers  and  the  greater 
the  difference  between  the  degree  of  efficiency  of  the  majority 
of  farmers  and  that  of  the  marginal  farmers,  the  greater  is  the 
differential  gain  which  will  go  to  farmers  as  personal  profits,  and 
the  better  able  they  will  be  to  become  landowners.  On  the  other 
hand,  the  more  homogeneous  the  farmers  who  supply  the  market, 
that  is,  the  smaller  the  number  who  have  gained  a  degree  of 
efficiency  above  that  of  the  marginal  farmer  and  the  less  this 
degree  of  difference,  the  smaller  is  the  total  differential  profit 
and  the  less  able  are  tenant  farmers  to  accumulate  sufficient 
wealth  to  buy  farms. 

Credit.  It  is  a  common  practice  in  the  United  States  for 
farmers  to  borrow  money  to  invest  in  land.  When  a  young 
man  has  saved  enough  money  to  pay  some  share,  say  half  or 
two-thirds  of  the  price  of  the  farm,  he  borrows  the  remainder 
and  makes  an  investment,  a  mortgage  being  given  to  secure  the 
loan.  This  enables  the  farmer  to  buy  land  much  sooner  than 
he  could  if  he  were  required  to  save  the  entire  amount  before 
making  the  purchase.  Where  the  rate  of  interest  charged  is 
not  too  high,  it  is  often  more  desirable  to  pay  interest  than  to 
pay  rent ;  for  the  difficulty  of  adjusting  the  relations  between 
the  landlord  and  tenant  is  in  this  way  removed,  and  the  farmer 

1  Fur  details  on  this  point  see  Chap.  XII. 


THE  FARMER'S  MEANS  OF  ACQUIRING  LAND        227 

is  free  to  improve  the  land  as  he  chooses,  knowing  the  benefits 
will  be  his  own. 

Farm  mortgage  indebtedness  was  first  reported  by  the  United 
States  Bureau  of  the  Census  for  1890.  At  that  time  28.2  per 
cent  of  the  farms  operated  by  their  owners  were  mortgaged. 
In  1900  the  percentage  was  31,  and  in  1910  it  was  33.6.  The 
total  encumbrance  reported  was  $1,085,995,960  in  1890  and 
$1,726,172,851  in  1910.  The  former  represented  35.5  per  cent 
of  the  value  of  the  mortgaged  farms,  while  the  latter  represented 
only  27.3  per  cent.  The  lower  rate  is  explained  by  the  fact  of 
increased  land  values. 

Throughout  the  southern  states,  where  the  percentage  of 
tenancy  is  high,  the  percentage  of  mortgaged  farms  is  low  as 
compared  with  the  percentage  in  the  North,  where  the  mortgage 
is  used  largely  as  a  means  of  acquiring  landownership  on  the 
part  of  young  men.  At  the  same  time  retiring  farmers  favor  the 
plan  of  selling  the  farm  and  leaving  a  large  share  of  its  value 
in  the  land,  taking  a  mortgage  for  security.  This  not  only 
facihtates  the  climbing  of  the  agricultural  ladder  on  the  part 
of  the  young  farmer,  but  it  aids  the  old  farmer  in  making  a  safe 
retreat  from  the  farm,  giving  him  plenty  of  time  to  familiarize 
himself  with  other  forms  of  investment  before  withdrawing 
his  funds  entirely  from  the  form  of  investment  which  he  under- 
stands. 

The  extent  to  which  mortgages  are  given  to  cover  a  part  of 
the  purchase  price  is  illustrated  by  the  following  quotation 
taken  from  a  special  study  made  in  connection  with  the  census 
for  1890 : 

"As  a  result  of  inquiries  made  in  102  selected  counties,  distributed 
throughout  the  United  States,  the  conclusion  is  that  80.13  per  cent 
of  the  mortgages  in  force  were  made  to  secure  the  purchase  price  of 
real  estate  and  to  make  real  estate  improvements,  when  these  objects 
are  not  complicated  with  other  objects,  and  that  the  original  amount 
of  these  mortgages  is  82.66  per  cent  of  the  total  original  amount  of 
all  mortgages  in  force.  If  to  these  objects  are  added  the  objects  of 
business  and  the  purchase  of  various  articles  of  personal  property  of 
the  more  durable  kind,  such  as  domestic  animals,  wagons,  farm 


228 


AGRICULTURAL  ECONOMICS 


THE   FARMER'S   MEANS  OF  ACQUIRING  LAND        229 

machines,  when  not  combined  with  other  objects,  the  mortgages  are 
89.82  per  cent  of  the  entire  number  in  force,  and  their  original  amount 
is  94.37  per  cent  of  the  total  original  amount  of  aU  mortgages  in 
force.  .  .  .  The  mortgages  distinctly  representing  a  loss  of  wealth, 
or  wealth  soon  to  be  consumed,  are  embraced  in  the  description  of 
farm  and  family  expenses,  and  their  number  is  5.4  per  cent  of  the 
total  number  of  mortgages  in  force,  w^hUe  their  original  amovmt  is 
1.73  per  cent  of  the  total  original  amount.  ...  A  distinction  must 
be  observed  between  the  cause  and  the  consequence  of  mortgages. 
The  mortgage,  in  its  motive,  is  for  the  most  part  a  mere  business 
venture,  and,  so  far  as  foreclosures  show,  for  the  most  part  a  success- 
ful one.  It  becomes  a  misfortune  when  for  any  reason  it  becomes  a 
business  mistake."  ^ 

These  figures,  it  is  true,  refer  to  real  estate  mortgages  gen- 
erally; but  there  is  no  reason  for  thinking  that  the  mortgage 
is  used  for  other  purposes  than  the  securing  of  the  purchase 
price  of  real  estate  in  the  case  of  farm  mortgages  more  frequently 
than  in  the  case  of  other  real  estate  mortgages.  In  general,  we 
would  be  inclined  rather  to  think  that  farm  mortgages  were 
more  likely  to  be  given  to  secure  the  purchase  price  than  the 
mortgages  on  city  lots,  for  example,  where  the  total  value  of  the 
lot  might  be  relatively  small  compared  with  the  value  of  the 
business  which  might  be  established  thereon,  and  which  might 
be  an  occasion  for  desiring  to  mortgage  the  real  estate  to  secure 
funds  to  extend  the  business.  In  general,  the  conclusion  which 
should  be  drawn  seems  to  be  that  the  mortgages  on  farms  are 
in  the  vast  majority  of  cases  used  as  a  means  of  making  the 
transition  from  tenancy  to  landownership,  and  are  frequently 
an  evidence  of  growing  prosperity. 

The  evidence  seems  to  show,  also,  that  the  farmers  are  usually 
successful  in  their  use  of  the  mortgage  as  a  means  of  acquiring 
the  ownership  of  land.  In  Illinois,  Michigan,  Minnesota,  and 
New  Jersey,  from  one-third  to  one-half  per  cent,  only,  of  the 
farm  mortgages  are  foreclosed  each  year ;  ^  and  the  average 
duration  of  farm  mortgages  in  the  United  States  is  about  five 

1  Eleventh  Census  of  the  United  States,  i8go,  Report  on  Real  Estate  Mortgages, 
p.  310. 

*  George  K.  Holmes,  Quarterly  Journal  of  Economics,  1896,  Vol.  X,  p.  49. 


230 


AGRICULTURAL  ECONOMICS 


years.^  From  this  we  may  conclude  that  in  the  above-named 
states  not  much  more  than  from  one  and  two-thirds  to  two  and 
one-half  per  cent  of  the  farm  mortgages  are  foreclosed.  But 
we  cannot  argue  from  this  that  from  ninety-seven  and  one-half 
to  ninety-eight  and  one-third  per  cent  of  the  mortgages  are  duly 
paid,  out  of  the  profits  of  agriculture.  Many  cases  will  come  to 
the  mind  of  the  reader,  where  the  unsuccessful  aspirants  to 
landownership  have  sold  their  mortgaged  farms  in  order  to  pay 
off  the  mortgage  and  save  a  part  of  their  original  investment. 
However,  it  is  fair  to  say  that  the  vast  majority  of  such  ad- 
ventures prove  successful. 

A  classification  by  age  groups  of  the  owners  of  farm  homes, 
in  the  United  States,  may  be  obtained  for  the  years  1890  and 
1900,  which  gives  the  percentage  of  the  owned  farm  homes  which 
are  encumbered.  This  classification  is  shown  in  the  following 
table :  - 

TABLE  XV 

The  Percentage  of  Owned  Farm  Homes  which  were  Known  to  be 
Encumbered,  in  the  North  Central  Division,  in  1890  and  1900, 
Classified  by  the  Age  of  the  Owners 


Age 

Percentage  Encumbered 

1890 

1900 

Under  25  years 

2?  to  xA.  years 

40.7 

49-5 
49.1 

44-S 
32.1 

43-6 
48.3 
48.3 
41.5 
32.2 

7,=^  to  44  years 

A^  to  ^4  years 

55  years  and  over 

From  these  figures  it  will  be  seen  that  the  percentage  of 
encumbrance  increases  from  youth  to  middle  age,  and  declines 
from  middle  age  to  old  age.  This  fact,  and  also  the  relation 
between  the  increase  in  the  percentage  of  mortgages  and  the 
decline  in  the  percentage  of  tenancy,  is  shown  more  clearly  in 

*  Eleventh  Census,  Repwrt  on  Farms  and  Homes,  p.  109. 

2  These  figures  were  calculated  from  the  Report  on  Farms  and  Homes  for  1890, 
and  from  Vol.  II  of  the  census  for  1900. 


FARM  OWNERSHIP  AND  TENANCY  IN  UNITED  STATES     263 


364 


AGRICULTURAL  ECONOMICS 


from  49.8,  in  1S90,  to  64.4  in  1900.  Of  the  farm-home  occupiers 
belonging  to  the  age  period  from  35  to  44  in  1890,  and  to  the  age 
period  45  to  54  in  1900,  64  per  cent  were  owners  at  the  earlier 
date,  and  70.7  per  cent  at  the  latter. 

TABLE    XXI 

Percentage  of  Farm  Homes  Classified  by  Tenure  and  Age  of  Farmer, 

1900 


State 

Age 

Per  Cent 

Per  Cent 

Per  Cent 

Owned 

Rented 

Unknown 

United  States 

Under  25  years    .     . 

27-35 

71.07 

1.58 

25-34  years     .     .     . 

44-85 

54-17 

.98 

35-44  years     .     .     . 

64.02 

35-35 

.63 

45-54  years     .     .     . 

70.34 

29-15 

•51 

55-64  years     .     .     . 

78.64 

20.85 

-51 

65  years  and  over     . 

84.29 

15.00 

-71 

Alabama 

Under  25  years    .     . 

18.56 

80.24 

1.20 

25-34  years     .     .     . 

32.53 

66.61 

.86 

35-44  years     .     .     . 

47.67 

51.69 

.64 

1 

45-54  years     .     .     . 

45-92 

53-49 

•59 

55-64  years     .     .     . 

51-78 

47-55 

-67 

65  years  and  over     . 

56.18 

42.98 

.84 

Georgia 

Under  25  years    .     . 

15-23 

83-03 

1.74 

25-34  years     .     .     . 

27.67 

71.21 

1. 12 

35-44  years     .     .     . 

42.00 

57-14 

.86 

45-54  years     .     .     . 

46.64 

52.61 

•75 

55-64  years     .     .     . 

50.94 

48.31 

-75 

65  years  and  over     . 

57-91 

41.05 

1.04 

Mississippi 

Under  25  years    .     . 

15.21 

83-53 

1.26 

25-34  years     .     .     . 

27-31 

71.90 

■79 

35-44  years     .     .     . 

38.37 

60.89 

•74 

45-54  years     .     .     . 

45-67 

53-72 

.61 

55-64  years     .     .     . 

46.53 

52.86 

.61 

65  years  and  over     . 

49.72 

49-56 

.72 

Texas 

Under  25  years    .     . 

20.05 

79-o8 

.87 

25-34  years     .     .     . 

34-48 

64.90 

.62 

35-44  years     .     .     . 

52-98 

46.63 

•39 

45-54  years     .     .     . 

60.04 

39.61 

•35 

55-64  years     .     .     . 

68.31 

31-33 

•36 

65  years  and  over     . 

74.06 

25-34 

.60 

Tlllnoi* 

Under  25  years    .     . 

23.69 

74.67 

1.64 

25-34  years     .     .     . 

35-63 

63.26 

I. II 

35-44  years     .     .     . 

56.83 

42.51 

.66 

45-54  years     .     .     . 

69.58 

29.84 

•58 

55-64  years     .     .     . 

81. IS 

18.28 

•57 

65  years  and  over     . 

88.53 

10.62 

.85 

FARM  OWNERSHIP  AND  TENANCY  IN  UNITED  STATES    265 


TABLE  XXI  (Continued) 


State 

Age 

Per  Cent 

Per  Cent 

Per  Cent 

Owned 

Rented 

Unknown 

Indiana 

Under  25  years    .     . 

29.38 

68.76 

1.96 

25-34  years     .     .     . 

47.63 

51-51 

.86 

35-44  years     .     .     . 

67.56 

31.89 

.55 

45-54  years     .     .     . 

77-95 

21-57 

.48 

55-64  years     .     .     . 

87.10 

12.45 

.45 

65  years  and  over     . 

91.71 

7-58 

.71 

Iowa 

Under  25  years    .     . 

23-66 

74-88 

1.46 

25-34  years     .     .     . 

29.08 

69.92 

1. 00 

35-44  years     .     .     . 

70.65 

28.88 

-47 

45-54  years     .     .     . 

76.24 

23-35 

.41 

55-64  years     .     .     . 

85.20 

14.18 

.62 

65  years  and  over     . 

90.50 

8.61 

.89 

North  Dakota 

Under  25  years    .     . 

82.97 

15-37 

1.66 

25-34  years     .     .     . 

86.44 

12.52 

1.04 

35-44  years     .     .     . 

90.40 

8.88 

-72 

45-54  years     .     .     . 

92.17 

7-32 

.51 

55-64  years     .     .     . 

93-56 

5-74 

.70 

65  years  and  over     . 

93.86 

5-11 

I -03 

Massachusetts 

Under  25  years    .     . 

57-54 

39-67 

2.79 

25-34  years     .     .     . 

70.30 

27.91 

1.79 

35-44  years     .     .     . 

80.74 

18.74 

-83 

45-54  years     .     .     . 

87-43 

12.02 

•55 

55-64  years     .     .     . 

92.61 

7-04 

-35 

65  years  and  over     . 

95-04 

4.28 

.68 

Nebraska 

Under  25  years    .     . 

26.53 

71.80 

1.67 

25-34  years     .     .     . 

4234 

56.6c 

-97 

35-44  years     .     .     . 

64.07 

35-31 

.62 

45-54  years     .     .     . 

75-56 

23-90 

-54 

55-64  years     .     .     . 

82.80 

16.65 

-55 

65  years  and  over     . 

85.24 

13.64 

1. 12 

New  York 

Under  25  years    .     . 

36.40 

61.77 

1.83    ' 

25-34  years     .     .     . 

50.53 

48.40 

1.07 

35-44  years     .     .     . 

67.10 

32-22 

.68 

45-54  years     .     .     . 

77.89 

21.71 

.40 

55-64  years     .     .     . 

85.96 

13.60 

-44 

65  years  and  over     . 

91.69 

7-75 

•56 

Wisconsin 

Under  25  years    .     . 

57.76 

40.93 

1.31 

25-34  years     .     .     . 

72.47 

26.73 

.80 

35-44  years     .     .     . 

85.70 

13.92 

.38 

45-54  years     .     .     . 

91.05 

8.61 

•34 

55-64  years     .     .     . 

94.42 

5-16 

.42 

65  years  and  over     . 

95-23 

4.09 

.68 

266  AGRICULTURAL  ECONOMICS 

These  figures  indicate  a  constant  movement  from  tenancy  to 
landownership.  But,  from  generation  to  generation,  a  smaller 
percentage  of  the  farmers  are  able  to  make  this  transition.  It 
should  be  noted  in  the  above  table  that  of  the  occupiers  of  farm 
homes  who  were  under  25  years  of  age,  a  smaller  percentage 
were  owners  in  1900  than  in  1890.  This  is  true  for  every  age 
period  given  in  the  table  except  one ;  the  reverse  being  true 
for  the  period  from  35  to  44.  This  suggests  that  the  decline 
in  the  percentage  of  landownership  is  due,  in  part,  to  the  in- 
abihty,  or  disinclination,  of  the  succeeding  generation  to  acquire 
landownership  so  generally  as  their  predecessors. 

The  movement  from  tenancy  to  ownership  has  been  more 
complete  in  some  parts  of  the  United  States  than  in  others. 
This  is  shown  in  the  previous  table,  which  shows  the  farm 
homes  of  selected  states  classified  by  tenure  and  by  age  of  the 
farmer. 

These  figures  show  that  in  those  southern  states  where  negro 
farmers  are  dominant  the  movement  from  tenancy  to  ownership 
is  far  less  pronounced  than  in  Texas  where  the  whites  predomi- 
nate over  the  blacks.  In  the  Northern  States  farmers  appear  to 
be  highly  successful  in  becoming  the  owners  of  farms.  Even  in 
Illinois,  where  39.3  per  cent  of  the  farmers  were  tenants,  all  but 
about  one-tenth  of  the  farmers  65  years  of  age  and  over  had 
succeeded  in  becoming  owners.  The  residuum  of  tenants  left  at 
this  age  was  8.6  per  cent  in  Iowa,  7.6  per  cent  in  Indiana,  and 
only  4.1  per  cent  in  Wisconsin.  To  contrast  the  old  with  the 
new,  Massachusetts  showed  4.3  per  cent  and  Nebraska  13.6 
per  cent  of  tenancy  among  farm-home  owners  65  years  of  age 
and  over.  That  this  contrast  is  not  general  is  shown  by  the 
fact  that  in  North  Dakota  the  percentages  of  tenancy  among 
these  older  farmers  was  only  5.1. 

A  proper  conception  of  the  economic  status  of  the  American 
farmer  at  the  close  of  the  nineteenth  century  must  give  proper 
emphasis  to  the  fact  of  landownership  on  the  part  of  farmers. 
In  the  North  landowning  farmers  generally  predominated.  In 
the  Cotton  Belt  tenants  outnumber  the  landowning  farmers. 
Figure   12   shows   the  distribution  of  landowning  farmers  in 


FARM  OWNERSHIP  AND  TENANCY  IN  UNITED  STATES    267 

1910.  The  small  number  of  owners  in  that  region  is  indicative 
of  the  fact  that  in  the  South  there  is  a  distinct  tenant  class. 

In  the  Cotton  Belt  the  land  is  still  in  the  possession  of  a  land- 
lord class.  In  parts  of  Virginia  where  the  land  has  not  been 
so  generally  retained  in  large  estates,  the  percentage  of  land- 
owning farmers  among  the  negroes  is  very  high.  This  can  be 
explained  in  part  by  the  lack  in  eastern  Virginia  of  a  great  staple 
crop  like  cotton  which  would  make  profitable  the  operation  of 
plantations  by  tenants,  and  partly  by  the  fact  that  the  negroes 
of  Virginia  are  a  higher  type  than  those  of  the  Cotton  Belt. 

The  apparent  superior  economic  position  of  the  northern 
farmer  is  somewhat  reduced  when  the  question  of  mortgage 
indebtedness  is  raised.  In  1900,  30  per  cent  of  the  farm  homes 
occupied  by  owners  were  mortgaged.  The  census  for  igoo 
shows  a  more  complete  analysis  of  the  farming  classes  by  tenures 
than  do  the  census  reports  for  1880  and  1890.  Those  other 
than  cash  and  share  tenants  renting  all  the  land  they  cultivated 
were  divided  into  four  classes,  namely,  owTiers,  54.9  per  cent, 
part  owners,  7.9  per  cent,  owners  and  tenants,  .9  per  cent,  and 
managers,  i  per  cent.  The  practice  of  farming  a  tract  of  rented 
land  in  addition  to  the  land  owned  seems  to  have  been  a  common 
practice  in  many  of  the  grain-growing  sections. 

Farms  operated  by  managers  were  not  so  numerous  but  were 
more  generally  large  farms,  so  that  while  they  are  only  i  per 
cent  of  the  farms  they  represent  10.7  per  cent  of  the  aggregate 
area  in  farms.  In  spite  of  the  fact  that  these  farms  include 
many  of  the  country  homes  of  wealthy  city  folk,  the  cheap  areas 
of  the  West  included  in  these  managed  farms  reduce  their  value 
to  only  5.5  per  cent  of  the  aggregate  value  of  farms. 

The  position  of  the  tenant  farmers  is  better  understood  when 
one  knows  more  of  the  character  of  the  landlords  whose  land 
they  cultivate.  It  has  been  shown  that  in  the  North  most 
tenant  farmers  sooner  or  later  become  landowning  farmers,  while 
in  the  South  a  very  large  proportion  of  the  tenants  never  rise 
to  the  position  of  landowners.  The  vast  majority  of  the  rented 
farms  in  the  North  are  owned  by  men  who  have  passed  through 
various  stages  of  acquiring  land  for  their  own  use,  and  who  are 


268  AGRICULTURAL  ECONOMICS 

found  in  the  landlord  class  only  in  the  later  years  of  their  lives. 
In  the  southern  states,  in  the  region  of  negro  cotton  tenants, 
there  is  a  landlord  class  whose  life  work  is  the  management  of 
landed  estates  operated  by  tenants. 

Great  landed  estates,  such  as  the  Scully  and  the  Sibley 
estates  in  IlHnois,  and  the  Wadsworth  estate  in  New  York, 
are  found  here  and  there  in  the  North,  but  they  are  exceptions. 
As  a  rule  the  landlords  are  retired  farmers.  Even  in  the  South, 
outside  of  the  areas  densely  populated  with  negroes  engaged 
in  cotton  production,  which  is  equivalent  to  saying  outside  of 
the  regions  where  large  cotton  plantations  were  operated  by 
slaves  in  i86o,  the  landlords  with  but  one  or  two  tenants  are 
most  common. 

The  statistics  relating  to  the  ownership  of  rented  farms  in 
1900  were  published  for  no  territorial  unit  smaller  than  the 
state,  hence  the  statistics  do  not  show  the  contrast  within  the 
southern  state  with  respect  to  the  size  of  estates  in  the  counties 
where  negro  tenants  predominate  in  numbers  and  in  the  counties 
where  white  tenants  are  in  the  majority,  but  the  influence  of 
the  old  cotton  plantation  system  and  its  reorganization  upon 
the  statistical  averages  for  the  South  is  shown  by  the  fact  that 
while  only  2  per  cent  of  the  rented  farms  owned  by  residents 
of  the  North  Central  States  were  in  estates  comprising  ten  farms 
or  more,  the  percentage  of  farms  of  the  same  class  in  the  South 
Central  States  was  20.9. 

Landlords  in  the  United  States,  whether  they  belong  to  the 
numerous  class  of  retired  farmers  or  to  the  small  class  of  owners 
of  great  estates,  are,  as  a  rule,  residents  of  the  district  in  which 
their  lands  are  located.  "  Of  the  1,934,346  farms  in  the  United 
States  for  which  the  names  and  post-office  addresses  of  the 
owners  were  reported,  the  owners  of  1,523,863,  or  78.8  per  cent, 
resided  in  the  same  county  in  which  their  farms  were  located ; 
307,656,  or  15.9  per  cent,  in  the  same  state  but  not  in  the  same 
county ;  102,827,  o^  5-3  P^r  cent,  outside  of  the  state  (of  which 
1097,  or  .051  per  cent,  were  in  foreign  countries).  Many 
residing  in  the  same  state,  but  not  in  the  same  county,  had 
homes  very  near  their  rented  farms.    This  was  notably  the 


FARM  OWNERSHIP  AND  TENANCY  IN  UNITED  STATES    269 

case  with  farms  located  near  county  lines.  Such  owners  can 
hardly  be  classed  as  non-residents,  and  the  very  small  per  cent 
of  rented  farms  owned  by  non-resident  landlords  would  have 
been  still  further  reduced  if  it  had  been  practicable  to  exclude 
such  owners. 

"  The  Western  division  had  the  smallest  proportion  of  rented 
farms  whose  owners  resided  in  the  county  where  their  rented 
farms  were  located.  .  .  .  The  South  Central  and  South 
Atlantic  divisions  had  the  largest  proportion  of  owners  residing 
in  the  county  where  their  rented  farms  were  located.  .  .  . 
The  North  Central  division  had  the  largest,  and  the  Western 
the  next  largest,  proportion  of  rented  farms  with  owners  residing 
outside  of  the  state."  ^ 

The  character  of  the  landlord  has  great  significance  when 
viewed  from  the  standpoint  of  the  tenant  farmer  who  hopes 
to  rise  to  the  position  of  a  landowning  farmer.  Land  leased  by 
the  retired  farmer  is  not  held  out  of  the  market  for  many  years, 
because  of  the  limits  set  to  life.  Upon  the  death  of  the  retired 
farmer,  if  not  at  an  earlier  date,  the  land  is  divided  among  heirs 
or  sold  to  settle  the  estate.  This  brings  land  upon  the  market 
and  helps  those  who  inherit  the  proceeds  to  buy  farms.  Per- 
manent landed  estates  managed  by  a  landlord  class  keep  land 
ofiE  the  market  so  far  as  tracts  of  a  size  which  a  small  farmer 
can  buy  are  concerned,  and  the  influence  of  inheritance  is  to 
maintain  the  landlord  class.  The  permanent  landlord  class 
trained  to  manage  estates  operated  by  tenants  is,  however,  not 
without  its  redeeming  feature,  as  any  one  will  conclude  who 
studies  the  present  methods  of  operating  landed  estates  in  the 
regions  of  negro  tenants  in  the  South  to-day.  Trained  land- 
lords with  large  estates  are,  as  a  rule,  more  agreeable  for  a 
tenant,  white  or  black,  to  deal  with  than  are  the  retired  farmers 
who  enter  the  landlord  class  for  a  few  years  late  in  life. 

1  Twelfth  Census  of  the  United  States,  1900,  Vol.  V,  p.  kxrvii. 


CHAPTER  XXn 

FORMS  OF  LAND  TENURE  IN  THE  UNITED   STATES 

IS   A   CERTAIN   AMOUNT   OF   TENANCY   A   GOOD   THING  ? 

In  the  discussion  of  the  size  of  farms  it  was  noted  that  for  a 
given  farmer  engaged  in  a  given  type  of  farming  at  a  given 
stage  in  his  own  development,  and  with  given  conditions  with 
respect  to  wages,  interest,  land  values,  and  prices  for  his  prod- 
ducts,  there  is  a  size  of  farm  which  will  pay  him  best.  The 
question  now  to  be  taken  up  relates  to  the  various  ways  in  which 
he  can  get  the  use  of  the  amount  of  land  he  finds  it  most  profit- 
able for  him  to  operate. 

Few  young  farmers  are  financially  able  to  own  the  amount  of 
land  they  can  operate  to  best  advantage.  If  each  man  operated 
the  land  he  is  capable  of  owning,  many  young  farmers  would 
be  operating  farms  too  small  for  their  energies,  and  many  old 
farmers  would  have  in  hand  far  more  land  than  they  could 
utilize  advantageously,  to  the  loss  of  the  young  farmer,  the  old 
farmer,  and  the  people  of  the  nation  who  consume  farm 
products. 

Farm  tenancy  is  an  institution  which  provides  for  getting  the 
land  into  the  hands  of  those  who  are  in  a  position  to  cultivate  it, 
but  who  are  unable  to  buy  farms.  In  its  best  forms,  tenancy 
in  a  limited  amount  may  be  a  good  thing.  In  1910  there  were 
2,354,676  or  37  per  cent  of  the  farmers  of  the  United  States 
reported  as  tenants  who  owned  none  of  the  land  they  farmed, 
and  593,825  or  9.3  per  cent  who  leased  part  of  the  land  they 
cultivated.  Thus,  it  would  seem  that  nearly  half  of  the  farmers 
are  using  tenancy  as  a  means  of  securing  the  use  of  the  land 
they  feel  capable  of  operating,  but  which  they  are  not  yet  able 
to  own.  It  is,  therefore,  a  matter  of  great  importance  that  the 
methods  of  leasing  land  be  such  as  will  be  conducive  to  good 

270 


FORMS  OF  LAND  TENURE  IN  THE  UNITED   STATES      271 

farming  and  to  the  well-being  of  the  tenant  farmers  and  to  the 
nation  as  a  whole. 

A  large  proportion  of  the  tenant  farmers  are  young  men  who 
are  in  the  process  of  earning  enough  money  to  buy  a  farm. 
This  is  especially  the  case  in  the  Northern  States.  In  Illinois, 
for  example,  nearly  44  per  cent  (43.77)  of  farm  homes  which 
were  rented  were  occupied  by  persons  under  thirty-five  years 
of  age,  whereas  less  than  1 5  per  cent  of  those  owning  their  farm 
homes  were  under  thirty-five  years  of  age. 

The  owners  of  rented  land  are  quite  generally  older  farmers 
who  have  retired  or  who  have  more  land  than  they  wish  to 
farm;  80  per  cent  of  the  owners  of  rented  land  have  but  one 
farm  let  to  tenants,  11.4  per  cent  have  but  two,  5.4  per  cent 
have  three  or  four,  2.3  per  cent  have  five  to  nine,  .7  per  cent  have 
ten  to  nineteen,  .2  per  cent  have  twenty  or  more  farms.  Taking 
the  United  States  as  a  whole  the  large  estate  made  up  of  rented 
farms  is  the  exception  and  the  landowner  with  one  or  two 
farms  to  rent  is  the  rule.  In  a  vast  number  of  cases  the  tenant 
is  the  son  or  son-in-law  of  the  landlord.  At  the  time  when  the 
parents  are  ready  to  retire  from  the  active  duties  the  farm 
is  usually  turned  over  to  one  member  of  the  family  on  a  tenant 
basis,  with  the  expectation  that  in  time  title  to  the  farm  will  be 
secured  by  the  tenant  and  he  will  become  the  owner  of  the  farm. 

While  tenancy  is  common  at  the  present  time  and  has  been 
present  in  the  United  States  since  the  beginning  of  our  nation,  it 
has  ever  been  looked  upon  merely  as  a  stepping  stone,  a 
temporary  means  of  acquiring  the  use  of  land,  and  not  as  a 
permanent  condition  for  any  individual.  The  statistics  show 
an  increase  in  the  percentage  of  tenancy,  however,  and  it  appears 
that,  on  the  average,  farmers  grow  older  as  tenants  than  they 
did  when  land  values  were  lower.  One  important  subject 
of  consideration  relates  to  the  means  of  maintaining  the  move- 
ment from  tenancy  to  ownership.  This  will  receive  especial 
consideration  in  a  later  chapter.  In  this  chapter  especial 
attention  will  be  given  to  the  methods  of  renting  land  with  a 
view  to  the  right  use  of  the  land  and  to  the  equitable  distribution 
of  the  products  of  the  land. 


272  AGRICULTURAL  ECONOMICS 

Points  to  be  considered  in  renting  land.  The  first  point  to 
be  considered  by  the  landlord  is  the  character  of  the  tenant 
to  whose  care  he  is  to  commit  his  farm.  Honesty  is  the  first 
essential,  without  which  the  farm  may  be  damaged  within  a 
year  to  an  amount  greater  than  the  annual  rent. 

Young  men  who  desire  to  succeed  as  tenant  farmers  cannot 
have  the  importance  of  honesty  too  strongly  impressed  upon 
them.  The  efficient  young  man  who  is  honest  finds  no  difficulty 
in  gaining  control  of  land  and  capital,  but  no  one  with  capital 
will  have  anything  to  do  with  a  dishonest  tenant  if  he  knows  him 
and  can  get  any  one  else.  Many  men  do  things  which  they 
count  very  shrewd,  but  which  at  once  puts  them  in  the  class 
of  men  who  have  to  be  watched,  and  it  is  a  general  principle 
that  the  greater  the  risk  the  higher  the  rate  of  profit  which 
the  capitalist  should  demand.  The  honesty  of  the  tenant  in- 
sures the  landlord  against  the  losses  he  is  in  danger  of  sus- 
taining if  the  tenant  is  dishonest.  The  landlord  can  afford,  and 
is  usually  willing,  to  pay  a  liberal  premium  for  this  insurance. 

Efficiency  is  equally  important.  If  the  farm  is  let  on  shares, 
the  income  of  the  landlord  is  dependent  upon  the  efficiency  of  the 
tenant.  If  let  for  cash,  it  is  much  better  to  have  a  capable 
tenant  who  can  pay  the  rent  with  ease,  since  the  reputation  of 
the  farm  depends  upon  the  success  of  the  tenant.  Every  tenant 
has  a  record, — look  into  this  record  before  making  a  contract. 

The  tenant  should  be  in  possession  of  a  requisite  amount  of 
capital  to  operate  the  farm  effectively.  This  amount  will  de- 
pend upon  the  type  of  farming  and  the  form  of  tenure.  It 
is  a  common  practice  for  the  landlord  to  supply  a  large 
proportion  of  the  operating  capital  where  he  is  assured  of  the 
honesty  and  efficiency  of  the  tenant.  It  does  not  make  so 
much  difference  who  provides  the  capital,  the  important  thing 
is  that  the  capital  certainly  be  provided. 

The  Farm  and  the  Landlord 

In  choosing  a  farm,  consider  its  suitabiHty  to  the  type  of 
farming  most  congenial  to  the  tenant,  location  with  respect  to 
markets,  schools,  etc.,  the  qualities  of  the  soil,  the  arrangement 


FORMS  OF  LAND  TENURE  IN  THE  UNITED  STATES      273 

of  the  fields  and  buildings  for  economy  of  labor,  the  size  of 
the  farm,  whether  it  will  give  full  scope  to  the  energy  of  the 
tenant,  the  water  supply,  and  the  sanitary  conditions  of  the 
home.  Ascertain  if  there  has  been  any  sickness  in  the  family 
or  disease  among  the  animals  of  the  former  tenant.  The  fair- 
ness of  the  rent  asked  should  be  looked  into  by  the  tenant. 
By  making  inquiry  of  the  outgoing  tenant,  the  neighbors,  the 
thrasher  man,  and  the  operator  of  the  local  creamery  or  cheese 
factory,  the  prospective  tenant  can  get  information  on  many 
of  these  points  and  at  the  same  time  ascertain  the  amount  of 
the  income,  the  expenditures,  and  other  factors  which  will  show 
the  possibilities  of  the  farm. 

The  farm  being  found  satisfactory,  make  sure  that  the  land- 
lord is  a  fair-minded  man,  capable  of  giving  good  advice  but 
not  overfree  with  his  suggestions  nor  overinsistent  upon  his 
own  notions  being  followed  in  detail.  A  nagging  landlord 
makes  the  day  long  and  the  work  tiresome. 

The  landlord  should  try  to  see  the  situation  from  the  view- 
point of  the  tenant  as  well  as  his  own  and  then  strive  to  be 
fair.  This  will  pay  not  only  in  the  satisfaction  that  results 
from  being  decent  with  one's  fellow-men,  but  also  in  greater 
returns  from  the  farm.  The  landlord  who  takes  advantage  of  a 
tenant  who  is  striving  to  do  the  right  thing,  and  "  grinds  him 
down,"  may  gain  a  few  cents  in  the  beginning,  but  he  will 
lose  dollars  in  the  end.  He  will  gain  the  reputation  of  being 
a  grasping  landlord.  Good  tenants  will  avoid  him,  for  it  is 
true  not  only  that  the  efficient  farmers  tend  to  get  the  most 
productive  land,  but  also  that  the  honest  tenant  tends  to  get 
the  honest  landlord. 

What  the  lease  should  contain.  The  lease  should  contain  a 
description  of  the  land  (the  description  found  in  the  deed  to  the 
land),  the  buildings,  and  such  other  property  belonging  to  the 
landlord  as  may  be  involved  in  the  agreement. 

Uses  of  property.  The  uses  and  the  limitations  upon  the 
uses  to  which  the  property  may  be  put  by  the  tenant  should 
be  stated  specifically  in  the  contract.  For  example,  the  land 
to  be  retained  in  permanent  pasture  should  be  described,  the 


274  AGRICULTURAL  ECONOMICS 

area  to  be  kept  in  meadow  stated,  the  crops  which  are  not 
to  be  grown  named,  the  uses  named  for  which  trees  may  be 
cut,  etc. 

Disposition  of  products.  It  is  through  the  regulation  of 
what  crops  are  to  be  produced  upon  the  farm,  and  the  forms 
in  which  the  products  of  the  farm  are  to  be  disposed  of,  that 
the  farming  may  be  directed  along  lines  least  exhausting  to  the 
soil.  In  general,  tenant  farmers  are  too  much  inclined  to  sell 
grain  and  hay  rather  than  live  stock  and  dairy  products.  This 
is  partly  due  to  the  lack  of  capital  on  the  part  of  tenant.  Re- 
strictive clauses  in  leases  which  require  that  all  hay,  straw,  corn 
fodder,  corn,  etc.,  be  fed  upon  the  farm  should  be  accompanied 
with  provisions  enabling  the  tenant  to  secure  the  necessary 
animals  to  consume  these  products. 

Use  of  manure  made  on  the  farm.  The  manure  made  upon 
the  farm,  from  feeds  produced  thereon,  belongs  to  the  land, 
and  in  no  case  should  any  tenant  be  allowed  to  remove  this 
manure  from  the  land.  Danger  from  this  source  arises  most 
commonly  in  the  case  of  farmers  who  own  a  farm  and  hire  ad- 
ditional land.  Land  leased  in  this  way  should  receive  its  pro 
rata  share  of  the  manure. 

Contracts  usually  provide  that  the  tenant  shall  spread  all 
manure  upon  the  land  at  such  points  as  the  owner  shall  direct. 
This  clause  is  more  or  less  useless,  as  a  new  tenant  will  gladly 
haul  all  the  manure  he  can  find,  while  a  tenant  who  expects  to 
leave  before  another  cropping  season  cannot  easily  be  forced 
to  haul  manure  for  his  successor.  The  obvious  remedy  is  to  pay 
the  tenant  for  hauling  the  manure  from  which  he  is  to  derive 
no  benefit  or  else  not  expect  him  to  perform  this  service. 

Purchase  of  feed  and  fertilizers.  In  order  that  the  tenant 
be  not  discouraged  in  buying  feeds  and  fertilizers  to  be  utilized 
upon  the  farm  the  contract  should  provide  for  compensation  to 
the  tenant  upon  the  termination  of  his  lease  for  the  unexhausted 
supplies  of  fertility  placed  in  the  soil  from  these  sources.  The 
payment  for  such  improvements  should  never  be  for  more  than 
the  benefit  to  be  derived  by  the  incoming  tenant.  Unwise 
expenditures  should  be  the  loss  of  him  who  makes  them. 


FORMS  OF  LAND  TENURE  IN  THE  UNITED  STATES      275 

Destruction  of  noxious  weeds.  Great  care  should  be  taken 
to  provide  in  the  contract  for  the  cutting  of  all  noxious  weeds 
before  they  mature  their  seeds.  A  clause  should  be  inserted 
providing  that  in  case  the  tenant  neglects  to  destroy  seed-bearing 
weeds  in  proper  season  the  landlord  may  enter  with  the  necessary 
help,  destroy  the  weeds,  and  charge  the  cost  to  the  tenant. 

In  the  case  of  Canada  thistles  and  quack  grass,  provision 
should  be  made  against  the  spreading  of  their  roots  over  the 
fields.  These  plants  may  have  got  a  start  along  a  fence  rov/  or 
along  a  ditch  where  the  land  has  not  been  cultivated  for  years. 
By  plowing  one  furrow  closer  than  has  been  the  practice  in  a 
place  of  this  kind  a  great  quantity  of  the  roots  may  be  loosened 
and  dragged  out  over  the  field.  Danger  of  spreading  these 
plants  should  be  guarded  against  strenuously.  The  saving  of 
the  land  from  the  encroachment  of  noxious  weeds  is  even  more 
important,  if  there  be  any  difference,  than  the  avoidance  of  soil 
exhaustion. 

Where  a  state  law  requires  the  destruction  of  noxious  weeds 
it  should  be  strenuously  enforced.  It  is  the  duty  of  every 
landlord  and  of  every  tenant  to  see  that  such  laws  are  obeyed. 

The  landlord  whose  farm  is  foul  with  weeds  should  not  ex- 
pect the  tenant  who  was  not  to  blame  for  this  condition  of  affairs 
to  clear  the  farm  from  these  pests  without  compensation. 
Where  this  work  is  not  performed  as  a  part  of  the  regular  culture 
of  the  crops,  the  tenant  should  receive  compensation  in  cash  in 
proportion  to  the  service  rendered.  The  landlord  who  does  not 
spend  money  in  fighting  the  encroaching  army  of  noxious  weeds 
will  soon  accept  a  much  lower  rent.  Where  the  destruction  of 
weeds  is  a  regular  farm  operation  necessary  to  the  production 
of  a  crop  the  tenant  should  not  expect  other  compensation  than 
that  coming  from  increased  production.  The  landlord  whose 
farm  is  clear  of  weeds  can  easily  secure  enough  more  rent  to 
make  his  activities  and  expenditures  in  the  destruction  of  weeds 
very  profitable. 

Value  of  a  tidy  farm.  The  landlord  should  take  great  care 
to  provide  neat  farm  buildings  and  fences.  The  tenant  should 
agree  to  maintain  a  tidy  appearance  about  the  house,  the  barns, 


276  AGRICULTURAL   ECONOMICS 

the  feed  lots,  the  fence  rows,  and  every  other  part  of  the  farm. 
There  is  a  considerable  advertising  value  in  good  appearances 
which  should  not  be  disregarded.  Where  it  is  not  profitable  in 
dollars  and  cents  it  pays  abundantly  in  the  satisfaction  that 
comes  from  the  greater  degree  of  contentment  and  self-respect 
enjoyed  by  the  farmer  and  his  family. 

New  buildings  and  fences.  In  the  construction  of  new 
fences  and  buildings  there  seems  to  be  no  settled  practice.  In 
some  cases  the  landlord  provides  the  material,  performs  all  of 
the  work,  and  pays  for  the  board  of  the  workmen,  the  tenant 
hauhng  the  material  from  the  nearest  station  and  boarding  the 
workmen  at  a  fixed  rate.  In  other  cases  the  tenant  performs  all 
of  the  unskilled  labor  and  boards  the  skilled  laborers  without 
charge  while  making  the  improvement. 

Repairs  on  fences  afid  buildings.  The  common  practice  in 
all  forms  of  leases  in  the  Northern  States  is  for  the  landlord  to 
furnish  the  material  and  the  tenant  to  do  all  the  work  required 
in  making  ordinary  repairs  on  fences  and  buildings.  In  some 
cases  a  distinction  is  made  between  the  "  inside  "  fences  and 
the  outside  or  "  line  fences,"  the  landlord  making  the  repairs 
on  the  latter  and  the  tenant  doing  the  work  required  in  making 
repairs  on  the  former. 

Another  plan  which  has  been  found  more  satisfactory  in  some 
instances  is  for  the  owner  of  the  land  to  pay  the  tenant  a  fixed 
sum  per  day  for  time  expended  under  the  owner's  supervision 
in  the  construction  and  repair  of  fences  and  buildings  and  ad- 
justing the  rent  accordingly.  This  may  result  in  a  more  cheerful 
service  of  the  tenant  in  working  on  fences  and  buildings. 

Some  experienced  landlords  require  the  tenants  to  make  good 
at  their  own  expense  damages  done  to  gates,  barn  doors,  pumps, 
etc.,  where  the  wear  and  tear  is  likely  to  be  very  great  with  a 
careless  tenant  and  very  httle  with  a  careful  one.  The  practice 
on  some  estates  is  for  the  landlord  to  furnish  the  parts  of  the 
pump  and  the  windmill  which  are  subject  to  little  wear,  and  to 
require  the  tenant  to  furnish  the  wearing  parts.  This  was  sug- 
gested by  the  difficulty  met  with  in  getting  tenants  to  oil  the 
windmill.    If  the  tenant  owns  the  gearing  and  wheel  of  the 


FORMS  OF  LAND  TENURE  IN  THE  UNITED  STATES      277 

windmill  he  is  less  likely  to  let  the  wheel  run  loose  in  a  high 
wind  or  let  it  run  for  weeks  at  a  time  without  oil. 

Fence  posts.  Where  post  timber  is  found  in  the  farm  wood- 
lot  it  is  common  practice  for  the  tenant  to  make  the  posts  needed 
for  repairs.  The  main  difficulty  arises  from  the  fact  that  tenants 
do  not  often  make  the  posts  early  enough  to  give  them  time  to 
season  before  they  are  put  into  the  ground.  The  remedy 
suggested  by  one  landlord  is  to  keep  a  supply  of  posts  on  hand 
on  the  farm  all  the  time  and  require  the  tenant  to  make,  under 
the  direction  of  the  landlord,  as  many  posts  each  year  as  he  has 
found  occasion  to  use.  This  problem  is  easily  solved  where  the 
landlord  looks  after  all  repairs  and  pays  the  tenant  for  his 
labor  in  making  repairs. 

Firewood.  It  is  the  common  practice  where  there  is  a  wood- 
lot  on  the  farm,  to  allow  the  tenant  to  secure  firewood  free  of 
charge.  It  is  often  prescribed  that  only  dead  and  down  timber 
may  be  taken  for  this  purpose.  In  any  case  growing  trees 
should  not  be  cut  until  all  dead  timber  has  been  taken.  It  is 
usually  prescribed  that  all  tops  or  slashings  not  taken  for  firewood 
shall  be  piled  and  burned  by  the  tenant. 

The  road  tax.  The  general  rule  is  for  the  tenant  to  work  or 
pay  the  road  tax.  It  is  often  stated  that  in  return  for  this  service 
the  tenant  shall  be  allowed  to  secure  firewood  from  the  farm, 
although  in  some  cases  where  this  latter  privilege  is  not  granted 
the  tenant  is  required  to  work  the  road  tax  without  any  special 
compensation  beyond  the  use  he  gets  of  the  road. 

Duration  of  leases.  There  is  perhaps  more  land  let  for 
one  year  at  a  time  or  from  year  to  year,  than  on  any  other  terms 
in  the  Corn  Belt,  and  yet  three-year  leases  and  five-year  leases 
are  very  common,  and  leases  for  two  years  and  for  four  years 
have  occasionally  been  noted.  It  is  not  uncommon  to  lease  a 
farm  for  a  period  of  three  or  five  years,  and  then  allow  the  tenant 
to  remain  on  the  farm  from  year  to  year  after  this  period  has 
elapsed,  in  case  this  is  agreeable  to  both  parties.  Another 
method  is  to  let  the  farm  for  one  year  with  the  agreement  that 
if  the  parties  are  both  satisfied  with  the  arrangement  the  first 
year,  the  contract  becomes  good  for  two  or  four  more  years. 


278  AGRICULTURAL  ECONOMICS 

It  is  generally  agreed  among  landlords  that  a  tenant  will  do 
better  if  he  can  plan  to  remain  for  three  or  five  years,  than  if 
he  is  uncertain  how  long  he  may  remain.  One  year  is  required 
for  the  tenant  to  become  acquainted  with  the  farm. 

On  a  dairy  farm,  where  stock  is  let  with  the  land,  it  is  much 
better  that  the  same  man  should  have  charge  of  the  cows  for 
a  long  period  than  for  the  tenants  to  be  changing  from  year 
to  year.  In  case  the  cows  are  owned  in  partnership  it  is  very 
unsatisfactory  to  be  dividing  the  herd  every  year.  The  follow- 
ing quotation  from  a  letter  from  a  Wisconsin  farmer,  who  lets 
land  on  shares  and  furnishes  a  part  of  the  stock,  will  help  to 
put  this  matter  in  a  clear  light : 

"If  I  knew  the  man  to  be  a  good  one,  and  one  that  would  suit,  I 
would  prefer  to  let  for  a  term  of  years,  say  from  three  to  five  years, 
as  a  man  only  gets  started  the  first  year,  for  he  has  the  farm  to  learn, 
and  it  is  not  best  to  be  changing  stock  every  year.  I  think  if  a  tenant 
knows  this  to  be  his  home,  he  will  take  more  interest  in  keeping  up 
the  place.  But  if  you  are  not  sure  the  man  will  suit,  or  be  satisfied 
to  stay,  I  should  rent  for  one  year,  as  it  is  very  easy  to  continue  the 
old  contract  or  make  a  new  one,  as  the  case  requires." 

If  there  is  any  difference,  there  seems  to  be  more  reason  for 
letting  land  for  a  number  of  years  when  let  for  cash  than  when 
on  shares.  It  is  thought  that  the  tenant  will  take  much  better 
care  of  the  land  when  he  has  it  for  a  number  of  years. 

The  system  of  crop  rotation  should  be  taken  into  account  in 
determining  the  period  of  the  lease,  so  that  the  tenant  may  have 
time  to  complete  the  rotation.  It  is  a  well-recognized  fact  that 
where  the  land  is  so  operated  as  to  prove  most  profitable  in  the 
long  run,  the  tenant  is  required  to  make  investments  in  the  form 
of  labor  in  improving  the  tilth  of  the  soil,  in  hauling  manure,  and 
sowing  grass  seeds,  on  which  he  can  realize  the  full  return  only 
after  a  number  of  years.  For  this  reason  it  is  thought  best  to  let 
land  for  several  years  at  a  time. 

In  Scotland  this  long  ago  led  to  the  introduction  of  19-  and 
2 1 -year  leases,  yet  these  very  long-term  leases  have  their  objec- 
tionable features  even  in  Scotland,  where  the  land  is  held  in 
large  estates  by  rich  men  who  have  no  thought  of  anything 


TENANT  FARMERS  IN  UNITED  STATES  PRIOR  TO  1880     247 

"When  I  called  the  family  were  from  home,  but  in  a  few  hours 
Colonel  Wadsworth,  the  younger  son,  visited  me,  in  a  most  open  and 
kind  manner  pressingly  invited  me  to  take  up  my  residence  at  his 
father's  house,  an  invitation  which  I  accepted. 

"I  found  the  elder  Mr.  Wadsworth  the  very  beau  ideal  of  a  fine 
old  EngHsh  country  gentleman :  tall  and  graceful  in  person,  and  in 
manners  courteous,  affable,  and  hospitable. 

"Mr.  Wadsworth's  property  comprises  about  forty  miles  of  coun- 
try, the  richness  and  picturesque  appearance  of  which  it  is  impossible 
in  adequate  terms  to  describe.  Of  this  property  Colonel  Wadsworth 
occupies  1600  acres,  1000  of  which,  in  the  Genesee  flats,  are  alluvial 
meadow  land  equal  to  any  in  the  vales  of  Aylesbury  and  Buckingham. 
"Mr.  Wadsworth  has  a  numerous  tenantry,  but  under  a  tenure 
which  can  yield  neither  profit  to  the  landlord  nor  benefit  to  them- 
selves ;  they  have  no  leases,  but  plow  and  sow  from  year  to  year, 
the  landlord  receiving  for  rent  a  portion  of  the  produce  in  kind. 
His  portion  is  ascertained  on  the  field  after  the  crop  is  reaped,  and 
is  delivered  by  the  tenants  at  an  appointed  barn  where  it  is  instantly 
threshed  out  and  the  straw  given  to  the  winds.  Such  a  system  must 
be  a  bar  to  every  improvement ;  it  in  fact  operates  as  a  prohibition 
of  all  exertion  and  expenditure  by  the  tenant  for  increasing  the 
fertility  of  his  farm,  it  being  unreasonable  to  expect  that  any  tenant 
will  use  exertions  or  lay  out  capital,  where  the  landlord  is  to  reap, 
certainly  a  large  share  of  the  benefit  thence  accruing,  and  from  the 
precariousness  of  the  tenure  perhaps  the  whole.  Mr.  Wadsworth 
therefore  may  go  on  to  draw  his  share  of  the  pittance  of  grain  which 
his  tenants  may  under  present  circumstances  be  able  or  disposed  to 
raise,  but  he  must  lay  his  account  that  in  these  circumstances  nothing 
can  be  done  by  them  to  improve  the  soil  and  render  it  duly  pro- 
ductive. .  .  . 

"Now,  although  Mr.  Wadsworth  is  an  acute  well-informed  man 
who  must  have  seen  well  and  far  before  him,  having  at  an  early 
period  made  an  extensive  purchase  of  land  at  a  price  greatly  under 
the  value  to  which  time  and  circumstances  have  raised  it,  yet  it 
appears  to  me  he  is  much  wedded  to  old  customs,  otherwise  he  would 
at  once  perceive  the  advantage  of  dividing  his  estate  into  farms  of  a 
proper  size,  erecting  on  them  suitable  buildings,  and  granting  leases 
for  such  a  term  of  years  as  would  insure  to  the  tenants  a  return  for 
money  expended  on  improvements.  By  similar  means  and  by  es- 
tablishing and  stipulating  for  judicious  modes  of  culture,  the  value  of 


248  AGRICULTURAL  ECONOAIICS 

land  in  Scotland  has  in  my  own  time  been  tripled;  and  I  have  no 
doubt  that  by  adopting  them  the  value  of  Mr.  Wadsworth's  prop- 
erty would  be  increased  in  the  same  ratio ;  but  I  was  unable  by  this 
argument  or  by  any  other  to  persuade  him  to  change  his  system  of 
tenancy."  ^ 

This  criticism  by  Captain  Barclay,  made  in  the  face  of  the 
fact  that  he  had  been  entertained  in  the  house  of  this  American 
country  gentleman  of  the  English  type  requires  some  explana- 
tion. The  original  James  Wads  worth  of  Geneseo,  while  travel- 
ing in  Europe  in  connection  with  the  sale  of  lands  in  western 
New  York,  formulated  the  plan  of  establishing  himself  in  the 
Genesee  Valley  after  the  fashion  of  an  English  landlord.  It 
is  fair  to  assume,  therefore,  that  he  was  not  without  knowledge 
of  the  English  system  of  leasing  land.  That  he  should  have 
modified  his  system  to  conform  to  American  conditions  is  a 
mark  of  his  sagacity.  Furthermore  at  the  time  when  James 
Wadsworth  was  falling  in  love  with  the  English  landed  estates, 
letting  land  from  year  to  year  was  the  rule  in  England,  but 
a  cash  rent  was  the  rule  instead  of  a  share  of  the  crops.  It 
should  be  noted  also  that  seventy  years  of  experience  has 
proved  that  Captain  Barclay's  view  on  the  subject  of  long 
leases  has  not  been  adhered  to  in  Great  Britain. 

Whatever  truth  there  may  have  been  in  Captain  Barclay's 
criticism  to  ^he  effect  that  the  Wadsworth  in  charge  of  the 
estate  in  1841  was  much  wedded  to  old  customs,  the  system  of 
rent  paying  on  the  Wadsworth  estate  had  materially  changed  by 
1867  and  more  or  less  in  conformity  to  the  suggestion  of  Barclay, 
at  least  the  rent  had  become  a  fixed  charge  instead  of  a  share, 
though  the  payment  was  partly  made  in  kind. 

In  writing  of  tenant  farming  in  1 8  6  7 ,  a  correspondent  of  the  New 
England  Farmer  residing  in  Orleans  County,  New  York,  said : 

"Probably  one  of  the  best  systems  of  tenant  farming  in  this  covm- 
try  is  that  adopted  on  the  Wadsworth  farms,  in  western  New  York, 
which  are  only  let  from  one  year  to  another.  But  then  no  tenant  is 
turned  off  without  cause;  the  rule  being  never  to  turn  off  a  good 
tenant,  nor  keep  a  poor  one.  These  farms  are  managed  by  an  ex- 
1  "Agrioiltural  Tour  in  the  United  States,"  pp.  36,  38,  44.  ' 


TENANT  FARMERS  IN  UNITED  STATES  PRIOR  TO  1880     249 

perienced  agent,  who  each  year  directs  which  fields  are  to  be  sown 
to  wheat,  which  put  into  spring  crops,  and  which  mowed  or  pastured ; 
all  being  arranged  in  rotation,  so  as  to  keep  the  land  in  good  condi- 
tion, and  give  a  reasonable  chance  to  make  m.oney.  The  rent  being 
a  certain  amount  of  wheat  per  acre,  for  the  land  sown  to  wheat ; 
something  less,  in  money,  for  spring  crops ;  less  yet  for  meadow,  and 
least  of  all  for  pasture.  The  tenant  also  pays  a  moderate  rent  for 
buildings  and  orchard,  and  all  taxes.  Repairs  made  by  tenant,  new 
buildings  and  fences  by  landlord.  Stipulations  in  regard  to  seeding 
down  and  making  manure  are  favorable  to  the  land,  without  being 
hard  on  the  tenant.  About  one-fi^fth  of  the  farm  is  generally  sown 
to  wheat,  which  gives  a  good  income  to  the  proprietor,  and  a  good 
chance  to  make  money  to  the  tenant."  ^ 

While  the  methods  of  letting  land  on  the  Wadsworth  estate 
have  not  conformed  very  closely  in  detail  to  the  English  system, 
the  general  principles  of  estate  management  are  essentially 
the  same.  The  estate  agent  is  found  performing  the  same 
functions  as  in  England  and  the  idea  of  living  after  the  fashion 
of  the  EngHsh  country  gentleman  has  not  been  lost  sight  of  by 
the  present  generation.  In  1907  one  driving  about  Geneseo 
might  meet  upon  the  road  a  carriage  party  driven  by  a  liveried 
coachman  similar  to  that  of  an  EngHsh  squire  or  a  Scottish 
laird.  Considerable  space  has  been  given  to  the  Wadsworth 
estate  because  it  is  a  rare  instance  of  a  landed  estate  of  the 
EngUsh  type  in  America. 

Tenant  farming  in  New  York  was  not  confined  to  large 
estates.  An  instance  is  given  of  a  dairy  farm  with  25  cows  in 
Herkimer  County  which  had  long  been  operated  by  the  owner 
but  which  was  being  operated  by  a  tenant  in  1845.^  In  the 
sheep  regions  of  New  York  and  Vermont  farms  were  sometimes 
let  to  tenants  who  owned  a  half  interest  in  the  "  sheep  and  other 
stock."  3 

To  quote  from  The  Cultivator  of  1844,  "  The  practice  prevails, 
to  some  extent,  of  letting  farms  to  tenants,  and  receiving  in  the 
shape  of  rent  a  portion  of  the  produce  in  kind,  say  a  third,  half, 

1  New  England  Farmer,  1867,  p.  97. 
*  The  Cultivator,  1845,  p.  84. 
*Ibid.,  1846,  p.  287;   1849,  p.  III. 


250  AGRICULTURAL  ECONOMICS 

or  two  thirds,  varying  with  the  amount  of  stock,  seed,  etc., 
furnished  by  the  proprietor."  ^  This  probably  relates  to  the 
state  of  New  York. 

H.  L.  Ellsworth,  an  owner  of  large  areas  of  land  near  La- 
fayette, Indiana,  throws  some  light  upon  tenant  farming  in 
Indiana  in  1845 :  "I  was  offered  sixteen  bushels  of  corn  as 
rent,  per  acre,  instead  of  one-third  of  the  crop  which  is  the  usual 
share  for  the  landlord.  I  have  rented  one  thousand  acres  of 
ground  for  sixteen  thousand  bushels  of  shelled  corn  delivered  in 
the  crib."  ^  Similar  methods  of  renting  land  were  in  use  near 
Coshocton,  Ohio,  where  in  1850  there  were  "  many  large  land- 
holders," some  of  whom  rented  out  their  lands  on  shares,  or  for 
20  bushels  of  com  per  acre.  The  tenants  occupied  only  from 
year  to  year.^ 

As  far  west  as  Oskaloosa,  Iowa,  farm  land  was  rented  to 
tenants  as  early  as  1858.^  In  lUinois,  in  1859,  when  land  could 
be  purchased  for  $2.50  an  acre  land  was  let  to  tenants  for  a 
share  of  the  grain. ^  Near  Belvidere,  lUinois,  in  i860,  a  region 
which  had  been  settled  about  25  years,  the  "  renting  so  many 
farms  without  having  them  stocked  "  is  mentioned  as  having 
a  bad  effect  upon  the  agriculture  of  the  region,  but  is  explained 
by  the  lack  of  capital.^  Near  Madison,  Wisconsin,  a  landlord 
was  advertising  for  a  man  "  to  carry  on  a  large  farm  either 
as  foreman  or  on  shares,  for  a  term  of  years."  ^ 

These  statements  give  no  basis  of  passing  judgment  on  the 
question  as  to  the  numerical  importance  of  tenant  farmers  prior 
to  the  Civil  War,  but  they  give  such  evidence  of  the  existence  of 
tenancy  as  keep  the  student  from  being  surprised  when  he  comes 
upon  the  statistics  of  tenancy  in  1880  and  finds  that  a  fourth  of 
the  farmers  did  not  at  that  time  own  the  acres  they  tilled. 

1  The  Cultivator,  1844,  p.  151.  ^  Pat.  Office  Report,  1845,  P-  384. 

'  The  Cultivator,  1850,  p.  358.  *  Country  Gentleman,  1858,  Vol.  XI,  p.  33. 

*  Caird,  "Prairie  Farming  in  America." 

'Country  Gentleman,  i860,  Vol.  XV,  p.  234. 

'  The  Wisconsin  Farmer,  1859,  Vol.  XI,  p.  72. 


CHAPTER  XXI 

FARM  OWNERSHIP  AND  TENANCY  IN  THE  UNITED  STATES 

SINCE  1880 

In  1880  there  were  4,008,907  farms  in  the  United  States. 
Three-fourths  (74.44  per  cent)  of  these  farms  were  occupied  by- 
owners,  while  one-fourth  (25.56  per  cent)  were  operated  by  ten- 
ants. The  tenant  farmer  was  not  confined  to  the  older  parts 
of  the  United  States.  The  renting  of  farms  was  practiced  in 
the  regions  of  most  recent  settlements  as  well  as  in  the  older 
states  of  the  East.  Tenants  were  found  on  the  very  margin  of 
cultivation  in  central  Kansas.  In  Illinois  there  were  more 
tenants  than  in  any  other  state  in  the  Union.  The  percentage 
of  all  farms  operated  by  tenants  was  only  8.2  in  Massachusetts, 
and  16.5  in  New  York  and  in  Pennsylvania,  while  31.4  per  cent 
of  the  farms  of  lUinois  were  operated  by  tenants. 

In  1910  there  were  6,361,502  farms  in  the  United  States,  63 
per  cent  of  which  were  operated  by  the  owners  directly  or 
through  hired  managers,  while  37  per  cent  were  operated  by 
tenants.  The  greater  part  of  this  increase  took  place  prior  to 
igoo.  The  percentage  of  tenants  in  1900  was  35.3.  Thus  the 
percentage  of  tenancy  increased  only  1.7  between  1900  and 
1910,  while  the  percentage  rose  from  28.4  in  1890  to  35.3  in 
1900,  an  increase  of  6.9.  Our  chief  attention  should  be  given, 
therefore,  to  the  explanation  of  changes  in  tenancy  prior  to 
1900.  The  tenure  statistics  for  the  four  census  dates  for  which 
such  statistics  are  available  are  not  exactly  comparable.  For 
1900  and  1910  farms  operated  by  owners  are  divided  into  three 
classes.  In  19 10  those  owning  all  the  land  they  operated  repre- 
sented 52.7  per  cent  of  all  farmers,  those  renting  additional 
land  9.3  per  cent,  those  operating  through  hired  managers  .9 
per  cent.  The  percentage  of  the  improved  land  operated  by 
tenants  was  32.7  in  1910.     The  percentage  in  1900  was  30.2. 

351 


252 


AGRICULTURAL  ECONOMICS 


Thus  in  terms  of  area,  tenancy  has  not  made  quite  as  great 
inroads  as  the  percentage  of  farms  operated  by  tenants  would 
indicate.  The  increase  between  1900  and  1910  is  greater,  how- 
ever, in  terms  of  improved  land  than  in  terms  of  farms. 

The  percentage  of  tenancy  was  higher  in  many  southern 
states  than  in  Illinois,  but  it  does  not  necessarily  follow  that 
a  higher  proportion  of  the  farm  land  in  the  South  was  rented. 
In  the  South  tenant  farms  were  usually  small  and  owned  farms 
were  generally  large.     This  is  shown  in  the  following  table : 


TABLE  XVIII 

Percentage  under  50  Acres  of  All  Farms  Operated  by  Tenants  or 

BY  Owners 

1880 


State 


Tenants 


Owners 


United  States 
Alabama  .  . 
Georgia  .  . 
Mississippi  . 
So.  Carolina 
Illinois  .  . 
Indiana  .  . 
Iowa  .  .  . 
Ohio    .     .     . 


49-25 
74-55 
63-57 
74-56 
79-35 
30-51 
36.77 
19-73 
29.26 


22.48 

15-50 
11.64 

13-94 
20.85 
19.79 
26.59 
14.38 
30.49 


In  the  four  corn  states  under  consideration  in  this  table,  there 
is  no  such  marked  difference  in  the  proportion  of  rented  and  of 
owned  farms  under  fifty  acres.  This  gives  ground  for  the 
belief  that  the  percentage  of  the  agricultural  area  operated  by 
tenants  in  the  South  was  much  smaller,  in  1880,  than  the  per- 
centage of  farms  operated  by  tenants. 

A  share  of  the  product  was  the  most  common  form  of  rent 
throughout  the  Union  in  1880,  with  the  exception  of  a  few 
counties  in  the  Cotton  Belt  where  the  rent  took  the  form  of  a 
specified  amount  of  cotton  and  was  counted  as  cash  rent  in  the 
census  reports.  Of  all  farms  in  the  United  States  17.52  per 
cent  were  operated  by  share  tenants,  8.04  per  cent  by  cash 


FARM  OWNERSHIP  AND  TENANCY  IN  UNITED  STATES    253 


254 


AGRICULTURAL  ECONOMICS 


FARM  OWNERSHIP  AND  TENANCY  IN  UNITED  STATES    255 


2S6  AGRICULTURAL  ECONOMICS 

tenants,  and  74.44  by  owners.  This  predominance  of  share 
tenancy  explains  why  references  to  tenancy  in  the  Hterature 
of  the  earher  decades  related  so  generally  to  share  tenancy. 
Share  tenancy  had  many  forms  and  was  common.  Cash 
tenancy  was  less  common  and  was  more  simple  and  less  varied 
in  form,  hence  cash  tenancy  was  discussed  less  than  share 
tenancy. 

The  decade  following  the  census  of  1880  brought  an  increase 
of  a  half  million  in  the  number  of  farms.  The  increase  in  tenant 
farmers  was  more  than  proportionate,  and  the  percentage  of 
share  tenants  rose  to  18.41,  that  of  cash  tenants  to  9.96,  while 
the  percentage  of  owners  fell  to  71.63.  In  the  decade  from  1880 
to  1890  share  tenants  increased  in  numbers  in  the  new  grain- 
growing  region  of  Minnesota,  the  Dakotas,  Nebraska,  and 
Kansas.  There  was  a  marked  increase  in  the  nmnber  of  share 
tenants  in  the  cotton  regions  of  Texas,  Mississippi,  and  Georgia. 
Cash  tenants  increased  markedly  in  the  cotton  region  of  South 
Carohna,  Alabama,  and  the  alluvial  of  the  Mississippi. 

The  next  ten-year  period  brought  an  increase  of  more  than  a 
million  in  the  number  of  farms,  but  in  spite  of  the  increase  in 
farms,  the  percentage  of  tenancy  increased  more  rapidly  than 
in  the  preceding  decade.  In  1900  share  tenants  constituted 
22.2  per  cent,  cash  tenants  13. i  per  cent,  leaving  64.7  per 
cent  representing  farms  operated  by  owners  or  part  owners 
directly  or  through  hired  managers.  It  will  be  noted  that  cash 
tenants  increased  at  a  more  rapid  rate  than  share  tenants. 
This  was  especially  true  in  those  cotton  states  where  negroes  pre- 
dominated. In  Texas  where  cotton  is  grown  largely  by  white 
farmers  there  was  an  increase  from  33.1  to  42.4  in  the  percentage 
of  share  tenants  and  a  decline  from  8.8  to  7.3  in  the  percentage 
of  cash  tenants.  In  South  CaroHna  the  percentage  of  cash 
tenancy  increased  from  27.75  ""^  189°  to  36.7  in  1900,  while  the 
percentage  of  share  tenancy  decreased  from  27.5  to  24.3.  But 
the  more  rapid  increase  in  cash  tenancy  was  not  confined 
entirely  to  the  South.  In  Iowa  the  percentage  of  cash  tenants 
increased  from  12.35  ^^  1S90  to  19.5  in  1900,  the  percentage 
of  share  tenancy  declined  from  15.7  to  15.4  in  the  same  period. 


FARM  OWNERSHIP  AND  TENANCY  IN  UNITED  STATES    257 

In  the  South  regions  of  cash  tenancy  are  more  generally 
regions  of  negro  tenants.  In  the  Black  Prairie  of  Texas,  where 
share  tenants  are  very  numerous,  negro  tenants  are  scarce 
and  white  tenants  are  present  in  great  numbers.  In  the  Yazoo- 
Mississippi  delta,  where  with  the  exception  of  two  counties  cash 
tenancy  prevails,  negroes  constitute  almost  the  whole  tenantry. 
The  same  is  true  of  the  Black  Prairie  of  Alabama  and  eastern 
Mississippi.  In  Georgia  and  South  CaroHna  negro  tenants 
and  cash  tenancy  are  associated  together  while  farther  to  the 
north  and  northwest,  in  these  two  states,  where  share  tenancy 
prevails,  the  negro  tenant  is  not  common,  while  white  tenants 
are  found  in  abundance. 

It  should  be  borne  in  mind  that  the  cash  rent  of  the  Cotton 
Belt  is  not  necessarily  a  fixed  amount  of  money.  It  is  very 
commonly  a  fixed  amount  of  cotton.  Furthermore  it  should  not 
be  inferred  that  cash  rent  necessarily  represents  a  higher  form 
of  tenancy  tJian  share  rent.  These  subjects  will  be  discussed 
in  detail  in  later  chapters  on  the  methods  of  renting  land.  The 
purpose  here  is  to  show  the  trend  of  affairs  with  regard  to  the 
increase  in  tenancy. 

By  comparing  the  figures  one  will  be  impressed  with  the 
enormous  increase  in  the  number  of  tenants  between  1880  and 
1900.  During  this  twenty -year  period  the  total  number  of  farms 
increased  43  per  cent,  wliile  the  number  of  farms  operated  by 
cash  and  share  tenants  increased  98  per  cent.  These  questions 
properly  arise :  Why  should  the  percentage  of  tenancy  increase 
so  rapidly  during  a  period  when  so  many  new  farms  were  becom- 
ing available  ?  Is  it  not  true  that  these  new  farms  have  been 
secured  by  taking  up  new  lands  at  a  low  price  which  is  conducive 
to  an  increase  in  the  ownership  of  land  on  the  part  of  tenants  ? 
In  answering  these  questions  many  facts  need  be  taken  into 
account.  It  is  true,  when  the  United  States  is  considered  as  a 
whole,  that  the  area  in  farms  has  increased  more  rapidly  than 
has  the  number  of  farms,  so  the  average  size  of  farms  was 
greater  in  1900  than  in  1880.  The  average  size  in  1880  was 
133.7  acres,  while  in  1900  it  was  146.6  acres.  But  when  the 
specific  states  are  considered  in  which  tenancy  has  been  in- 


2S8 


AGRICULTURAL  ECONOMICS 


creasing  so  rapidly,  the  matter  appears  somewhat  different. 
This  is  shown  in  the  following  table : 

TABLE  XIX 

Average  Size  of  Farms  and  the  Number  of  Farms  of  500  Acres  and 
Over  in  Specified  States  in  1880  and  in  1900 


1880 

1900 

State 

Average 
Size 

Number  of 
Farms  of 
500  Acres 

AND  OVER 

Average 
Size 

Number  or 
Farms  of 
500  Acres 

AND  OVER 

Alabama 

Georgia 

Mississippi 

South  Carolina .... 

139- 
188. 
156. 
143- 

6,513 
10,508 

5,769 
5,328 

92.7 

II7-S 
82.6 
90.0 

3,744 

6,576 
3,320 
3,324 

These  figures  suggest  that  the  increase  in  tenancy  may  have 
resulted  from  the  breaking  up  of  large  farms  into  small  holdings 
let  to  tenants.  All  of  the  states  in  the  above  table  showed  a 
marked  decrease  in  the  number  of  farms  containing  500  acres 
and  over,  and  a  great  increase  in  small  farms. 

The  decline  in  the  number  of  large  farms  was  not  confined 
to  the  Southern  States.  The  number  of  farms  of  500  acres  and 
over  in  Illinois  decreased  from  3898  to  2333,  though  there  was 
no  important  change  in  the  average  size  of  farms  in  that  state 
owing  to  counterbalancing  changes  in  other  size  groups.  In 
Texas  a  breaking  down  of  large  farms  into  small  ones  was 
going  on  in  the  Black  Prairie,  but  this  was  more  than  counter- 
balanced in  the  state  as  a  whole  by  the  development  of  large 
ranches  in  the  cattle  country  to  the  west  and  south.  Hence, 
this  cotton  and  cattle  state  illustrates  the  way  in  which  averages 
covering  diversified  territory  cover  up  the  facts  regarding  the 
tendencies  in  given  regions. 

That  cotton  production  was  gradually  becoming  organized 

on  a  tenant  basis  instead  of  a  wages  system  is  further  borne  out 

by  statistics  which  show  a  decline  in  the  expenditure  for  labor 

in  1870  ^  and  in  1900  in  this  region.     There  was  a  decline  in  the 

>  No  statistics  available  for  1880,  hence  1870  figures  are  used. 


FARM  OWNERSHIP  AND  TENANCY  IN  UNITED  STATES    259 


26o  AGRICULTURAL  ECONOMICS 

wages  system  in  the  same  regions  where  large  farms  were 
decreasing  and  where  small  farms  and  tenant  farmers  were 
rapidly  increasing.  These  facts  seem  to  bear  out  the  theory 
that  in  the  Cotton  Belt  tenancy  had  increased  at  the  expense 
of  the  wage  laborers  and  hence  marked  a  rise  in  the  status 
of  the  tillers  of  the  soil.  The  extent  to  which  this  change  in 
name  corresponded  to  a  real  change  in  economic  status  will  be 
considered  later. 

Lest  there  should  be  a  tendency  to  credit  the  high  percentage 
of  tenancy  in  the  South  entirely  to  the  presence  of  the  negro, 
who  so  recently  started  life  as  a  freedman  with  nothing  but  his 
hands,  let  it  be  noted  that  in  the  Black  Prairie  of  Texas  and  in 
the  northern  parts  of  the  cotton  regions  of  the  older  cotton 
states,  where  the  farmers  are  generally  whites,  the  increase 
in  tenancy  has  gone  on  with  very  great  rapidity  if  not  quite  as 
rapidly  as  in  the  regions  of  negro  tenants.  By  comparing  the 
location  of  slaves  in  i860  with  the  location  of  negro  tenants  in 
1 9 10  it  becomes  obvious  that  in  the  southern  states  few  negro 
tenants  were  found  in  19 10  beyond  the  regions  where  they  were 
abundant  as  slaves  in  i860.  In  the  new  cotton  region  of  Texas 
the  whites  have  gone  in  to  occupy  the  land.  The  remarkable 
thing  is  that  they  are  so  generally  tenants. 

One  hypothesis  which  may  be  ventured  as  an  explanation  of 
this  common  fate  of  the  whites  of  the  new  cotton  region  and  the 
negroes  of  the  old  cotton  regions,  is  that  while  in  the  old  slave 
regions  the  wages  system  gradually  gave  way  to  a  form  of  tenant 
holdings  which  the  census  recognized  as  separate  farms,  there 
was  a  breaking  down  of  great  cattle  ranches  in  Texas  into 
small  farms  and  that  white  immigrants,  largely  from  the  older 
cotton  states,  went  in  as  tenants  of  the  large  proprietors.  The 
two  cases  had  this  in  common  that  the  land  had  previously  been 
acquired  in  large  estates.  The  breaking  down  of  large  farms 
does  not  imply  the  breaking  down  of  estates.  The  change  may 
have  been  in  the  landlord's  method  of  operating  his  land. 

The  change  from  large  farms  operated  by  hired  laborers  to 
estates  of  small  farms  operated  by  tenants  is  not  a  complete 
explanation  of  the  increase  in  tenancy. 


FARM  OWNERSHIP  AND  TENANCY  IN  UNITED  STATES    261 


It  is  a  matter  of  common  observation  that  in  the  northern 
states,  young  men  start  in  as  laborers,  become  tenant  farmers, 
and  later  buy  farms  and  join  the  ranks  of  landowning  farmers. 
The  above  facts  show  that  in  the  southern  states  the  movement 
from  the  wage  earners  to  tenant  farmers  was  abnormally  rapid 
between  1880  and  1900,  due  to  a  reorganization  of  the  methods 
of  handling  landed  estates.  To  some  extent  this  same  move- 
ment was  in  evidence  in  central  IlUnois  and  in  other  northern 
states,  but  there  are  facts  which  tend  to  show  that  the  increase 
in  tenancy  was  due  in  part  to  a  slowing  down  of  the  movement 
from  tenancy  to  ownership.   This  is  shown  in  the  following  table : 

TABLE  XX 
Percentage  of  Persons  Owning  and  Renting  Farm  Homes 


1890 

1900 

Owned 

Rented 

Owned 

Rented 

Under  25  years 

25  to  34  years 

35  to  44  years 

45  to  54  years 

SS  years  and  over 

32.6 
49.8 
64.0 

72.3 
82.2 

67.4 
50.2 
36.0 
27.7 
17.8 

27.8 

45-3 
64.4 
70.7 
81.4 

72.2 
54-7 
35.6 

29-3 
18.6 

This  table  indicates  that  nearly  three-fourths  of  the  farmers 
under  twenty-j&ve  years  of  age  are  tenants ;  that  the  percentage 
of  tenant  farmers  declines,  and  the  percentage  of  landowning 
farmers  increases,  as  we  pass  from  the  younger  to  the  older  age 
periods,  until  less  than  a  fifth  of  the  farmers  who  are  fifty-five 
years  of  age  and  over  are  tenants. 

Statistics  of  this  kind  were  first  collected  in  1890,  and  while 
they  showed  the  status  at  that  time  and  suggested  a  movement 
from  tenancy  to  landownership,  they  did  not  prove  the  existence 
of  such  a  movement.  By  comparing  the  figures  for  1890  with 
those  for  1900,  this  movement  is  clearly  shown.  The  occupiers 
of  farm  homes  who  were  from  25  to  34  years  of  age  in  1890,  were 
from  35  to  44  in  1900.  By  comparing  these  occupiers  at  the 
two  dates,  we  find  an  increase  in  the  percentage  of  home  owners, 


262 


AGRICULTURAL  ECONOMICS 


FARM  OWNERSHIP  AND  TENANCY  IN  UNITED  STATES     263 


e> 


*   , 


264 


AGRICULTURAL  ECONOMICS 


from  49.8,  in  1890,  to  64.4  in  1900.  Of  the  farm-home  occupiers 
belonging  to  the  age  period  from  35  to  44  in  1890,  and  to  the  age 
period  45  to  54  in  1900,  64  per  cent  were  owners  at  the  earher 
date,  and  70.7  per  cent  at  the  latter. 

TABLE  XXI 

Percentage  of  Farm  Homes  Classified  by  Tenure  and  Age  of  Farmer, 

1900 


State 

Per  Cent 

Per  Cent 

Per  Cent 

Owned 

Rented 

Unknown 

United  States 

Under  25  years    .     . 

27-35 

71.07 

1.58 

25-34  years     .     .     . 

44-85 

54-17 

.98 

35-44  years     .     .     . 

64.02 

35-35 

.63 

45-54  years     .     .     . 

70.34 

29.15 

•SI 

55-64  years     .     .     . 

78.64 

20.85 

•51 

65  years  and  over     . 

84.29 

15.00 

.71 

Alabama 

Under  25  years    .     . 

18.56 

80.24 

1.20 

25-34  years     .     .     . 

32.53 

66.61 

.86 

35-44  years     .     .     . 

47.67 

51.69 

.64 

45-54  years     .     .     . 

45-92 

53-49 

-59 

55-64  years     .     .     . 

51.78 

47-55 

-67 

65  years  and  over     . 

56.18 

42.98 

.84 

Georgia 

Under  25  years    .     . 

15-23 

83.03 

1-74 

25-34  years     .     .     . 

27.67 

71.21 

1. 12 

35-44  years     .     .     . 

42.00 

57-14 

.86 

45-54  years     .     .     . 

46.64 

52.61 

•75 

55-64  years     .     .     . 

50-94 

48.31 

-75 

65  years  and  over     . 

57-91 

41.05 

1.04 

MissisBippi 

Under  25  years    .     . 

15.21 

83-53 

1.26 

25-34  years     .     .     . 

27.31 

71.90 

•79 

35-44  years     .     .     . 

38-37 

60.89 

•74 

45-54  years     .     .     . 

45-67 

53-72 

.61 

55-64  years     .     .     . 

46.53 

52.86 

.61 

65  years  and  over     . 

49.72 

49-56 

.72 

Texas 

Under  25  years    .     . 

20.05 

79.08 

.87 

25-34  years     .     .     . 

34-48 

64.90 

.62 

35-44  years     .     .     . 

52.98 

46.63 

•39 

45-54  years     .     .     . 

60.04 

39.61 

•35 

55-64  years     .     .     . 

68.31 

31-33 

•36 

65  years  and  over     . 

74.06 

25-34 

.60 

nnnoii 

Under  25  years    .     . 

23-69 

74-67 

1.64 

25-34  years     ,     .     . 

35-63 

63.26 

I. II 

35-44  years     .     .     . 

56.83 

42.51 

.66 

45-54  years     .     .     . 

69.58 

29.84 

.58 

55-64  years     .     .     . 

81.15 

18.28 

•57 

65  years  and  over    . 

88.53 

10.62 

.85 

FARM  OWNERSHIP  AND  TENANCY  IN  UNITED  STATES    265 


TABLE  XXI  (Continued) 


Age 

Per  Cent 

Pee  Cent 

Per  Cemt 

State 

Owned 

Rented 

Unslnown 

Indiana 

Under  25  years    .     . 

29.38 

68.76 

1.96 

25-34  years     .     .     . 

47.63 

51-51 

.86 

35-44  years     .     .     . 

67.56 

31.89 

•55 

45-54  years     .     .     . 

77-95 

21-57 

.48 

55-64  years     .     .     . 

87.10 

12.45 

-45 

65  years  and  over     . 

91.71 

7-58 

-71 

Iowa 

Under  25  years    .     . 

23.66 

74-88 

1.46 

25-34  years     .     .     . 

29.08 

69.92 

1. 00 

35-44  years     .     .     . 

70.65 

28.88 

-47 

45-54  years     .     .     . 

76.24 

23-35 

.41 

55-64  years     .     .     . 

85.20 

14.18 

.62 

65  years  and  over    . 

90.50 

8.6t 

.89 

North  Dakota 

Under  25  years    .     . 

82.97 

15-37 

1.66 

25-34  years     .     .     . 

86.44 

12.52 

1.04 

35-44  years     .     .     . 

90.40 

8.88 

.72 

45-54  years     .     .     . 

92.17 

7-32 

.51 

55-64  years     .     .     . 

93-56 

5-74 

.70 

65  years  and  over     . 

93-86 

5-11 

I -03 

Massachusetts 

Under  25  years    .     . 

57-54 

39-67 

2.79 

25-34  years     .     .     . 

70.30 

27.91 

1.79 

35-44  years     .     .     . 

80.74 

18.74 

.83 

45-54  years     .     .     . 

87-43 

12.02 

.55 

55-64  years     .     .     . 

92.61 

7.04 

.35 

65  years  and  over     . 

95-04 

4.28 

.68 

Nebraska 

Under  25  years    .     . 

26.53 

71.80 

1.67 

25-34  years     .     .     . 

42-34 

56.6c 

.97 

35-44  years     .     .     . 

64.07 

35-31 

.62 

45-54  years     .     .     . 

75-56 

23.90 

.54 

55-64  years     .     .     . 

82.80 

16.65 

•55 

65  years  and  over     . 

85.24 

13.64 

1. 12 

New  York 

Under  25  years    .     . 

36.40 

61.77 

1.83 

25-34  years     .     .     . 

50.53 

48.40 

1.07 

35-44  years     .     .     . 

67.10 

32.22 

.68 

45-54  years     .     .     . 

77.89 

21.71 

.40 

55-64  years     .     .     . 

85.96 

13.60 

-44 

65  years  and  over     . 

91.69 

7-75 

.56 

Wisconsin 

Under  25  years    .     . 

57.76 

40.93 

1.31 

25-34  years     .     .     . 

72.47 

26.73 

.80 

35-44  years     .     .     . 

85.70 

13-92 

.38 

45-54  years     .     .     . 

91.05 

8.61 

•34 

55-64  years     .     .     . 

94.42 

5-16 

.42 

65  years  and  over     . 

95-23 

4-09 

.68 

266  AGRICULTURAL  ECONOMICS 

These  figures  indicate  a  constant  movement  from  tenancy  to 
landownership.  But,  from  generation  to  generation,  a  smaller 
percentage  of  the  farmers  are  able  to  make  this  transition.  It 
should  be  noted  in  the  above  table  that  of  the  occupiers  of  farm 
homes  who  were  under  25  years  of  age,  a  smaller  percentage 
were  owners  in  1900  than  in  1890.  This  is  true  for  every  age 
period  given  in  the  table  except  one;  the  reverse  being  true 
for  the  period  from  35  to  44.  This  suggests  that  the  decline 
in  the  percentage  of  landownership  is  due,  in  part,  to  the  in- 
ability, or  disincUnation,  of  the  succeeding  generation  to  acquire 
landownership  so  generally  as  their  predecessors. 

The  movement  from  tenancy  to  ownership  has  been  more 
complete  in  some  parts  of  the  United  States  than  in  others. 
This  is  shown  in  the  previous  table,  which  shows  the  farm 
homes  of  selected  states  classified  by  tenure  and  by  age  of  the 
farmer. 

These  figures  show  that  in  those  southern  states  where  negro 
farmers  are  dominant  the  movement  from  tenancy  to  ownership 
is  far  less  pronounced  than  in  Texas  where  the  whites  predomi- 
nate over  the  blacks.  In  the  Northern  States  farmers  appear  to 
be  highly  successful  in  becoming  the  owners  of  farms.  Even  in 
Illinois,  where  39.3  per  cent  of  the  farmers  were  tenants,  all  but 
about  one-tenth  of  the  farmers  65  years  of  age  and  over  had 
succeeded  in  becoming  owners.  The  residuum  of  tenants  left  at 
this  age  was  8.6  per  cent  in  Iowa,  7.6  per  cent  in  Indiana,  and 
only  4.1  per  cent  in  Wisconsin.  To  contrast  the  old  with  the 
new,  Massachusetts  showed  4.3  per  cent  and  Nebraska  13.6 
per  cent  of  tenancy  among  farm-home  owners  65  years  of  age 
and  over.  That  this  contrast  is  not  general  is  shown  by  the 
fact  that  in  North  Dakota  the  percentages  of  tenancy  among 
these  older  farmers  was  only  5.1. 

A  proper  conception  of  the  economic  status  of  the  American 
farmer  at  the  close  of  the  nineteenth  century  must  give  proper 
emphasis  to  the  fact  of  landownership  on  the  part  of  farmers. 
In  the  North  landowning  farmers  generally  predominated.  In 
the  Cotton  Belt  tenants  outnumber  the  landowning  farmers. 
Figure   12   shows  the  distribution  of  landowning  farmers  in 


FARM  OWNERSHIP  AND  TENANCY  IN  UNITED  STATES    267 

1910.  The  small  number  of  owners  in  that  region  is  indicative 
of  the  fact  that  in  the  South  there  is  a  distinct  tenant  class. 

In  the  Cotton  Belt  the  land  is  still  in  the  possession  of  a  land- 
lord class.  In  parts  of  Virginia  where  the  land  has  not  been 
so  generally  retained  in  large  estates,  the  percentage  of  land- 
owning farmers  among  the  negroes  is  very  high.  This  can  be 
explained  in  part  by  the  lack  in  eastern  Virginia  of  a  great  staple 
crop  like  cotton  which  would  make  profitable  the  operation  of 
plantations  by  tenants,  and  partly  by  the  fact  that  the  negroes 
of  Virginia  are  a  higher  type  than  those  of  the  Cotton  Belt. 

The  apparent  superior  economic  position  of  the  northern 
farmer  is  somewhat  reduced  when  the  question  of  mortgage 
indebtedness  is  raised.  In  1900,  30  per  cent  of  the  farm  homes 
occupied  by  owners  were  mortgaged.  The  census  for  1900 
shows  a  more  complete  analysis  of  the  farming  classes  by  tenures 
than  do  the  census  reports  for  1880  and  1890.  Those  other 
than  cash  and  share  tenants  renting  all  the  land  they  cultivated 
were  divided  into  four  classes,  namely,  owners,  54.9  per  cent, 
part  owners,  7.9  per  cent,  owners  and  tenants,  .9  per  cent,  and 
managers,  i  per  cent.  The  practice  of  farming  a  tract  of  rented 
land  in  addition  to  the  land  owned  seems  to  have  been  a  common 
practice  in  many  of  the  grain-growing  sections. 

Farms  operated  by  managers  were  not  so  numerous  but  were 
more  generally  large  farms,  so  that  while  they  are  only  i  per 
cent  of  the  farms  they  represent  10.7  per  cent  of  the  aggregate 
area  in  farms.  In  spite  of  the  fact  that  these  farms  include 
many  of  the  country  homes  of  wealthy  city  folk,  the  cheap  areas 
of  the  West  included  in  these  managed  farms  reduce  their  value 
to  only  5.5  per  cent  of  the  aggregate  value  of  farms. 

The  position  of  the  tenant  farmers  is  better  understood  when 
one  knows  more  of  the  character  of  the  landlords  whose  land 
they  cultivate.  It  has  been  shown  that  in  the  North  most 
tenant  farmers  sooner  or  later  become  landowning  farmers,  while 
in  the  South  a  very  large  proportion  of  the  tenants  never  rise 
to  the  position  of  landowners.  The  vast  majority  of  the  rented 
farms  in  the  North  are  owned  by  men  who  have  passed  through 
various  stages  of  acquiring  land  for  their  own  use,  and  who  are 


268  AGRICULTURAL  ECONOMICS 

found  in  the  landlord  class  only  in  the  later  years  of  their  lives. 
In  the  southern  states,  in  the  region  of  negro  cotton  tenants, 
there  is  a  landlord  class  whose  hfe  work  is  the  management  of 
landed  estates  operated  by  tenants. 

Great  landed  estates,  such  as  the  Scully  and  the  Sibley 
estates  in  IlHnois,  and  the  Wadsworth  estate  in  New  York, 
are  found  here  and  there  in  the  North,  but  they  are  exceptions. 
As  a  rule  the  landlords  are  retired  farmers.  Even  in  the  South, 
outside  of  the  areas  densely  populated  with  negroes  engaged 
in  cotton  production,  which  is  equivalent  to  saying  outside  of 
the  regions  where  large  cotton  plantations  were  operated  by 
slaves  in  i860,  the  landlords  with  but  one  or  two  tenants  are 
most  common. 

The  statistics  relating  to  the  ownership  of  rented  farms  in 
1900  were  published  for  no  territorial  unit  smaller  than  the 
state,  hence  the  statistics  do  not  show  the  contrast  within  the 
southern  state  with  respect  to  the  size  of  estates  in  the  counties 
where  negro  tenants  predominate  in  numbers  and  in  the  counties 
where  white  tenants  are  in  the  majority,  but  the  influence  of 
the  old  cotton  plantation  system  and  its  reorganization  upon 
the  statistical  averages  for  the  South  is  shown  by  the  fact  that 
while  only  2  per  cent  of  the  rented  farms  owned  by  residents 
of  the  North  Central  States  were  in  estates  comprising  ten  farms 
or  more,  the  percentage  of  farms  of  the  same  class  in  the  South 
Central  States  was  20.9. 

Landlords  in  the  United  States,  whether  they  belong  to  the 
numerous  class  of  retired  farmers  or  to  the  small  class  of  owners 
of  great  estates,  are,  as  a  rule,  residents  of  the  district  in  which 
their  lands  are  located.  "  Of  the  1,934,346  farms  in  the  United 
States  for  which  the  names  and  post-office  addresses  of  the 
owners  were  reported,  the  owners  of  1,523,863,  or  78.8  per  cent, 
resided  in  the  same  county  in  which  their  farms  were  located ; 
307,656,  or  15.9  per  cent,  in  the  same  state  but  not  in  the  same 
county ;  102,827,  o^  5.3  per  cent,  outside  of  the  state  (of  which 
1097,  or  .051  per  cent,  were  in  foreign  countries).  Many 
residing  in  the  same  state,  but  not  in  the  same  county,  had 
homes  very  near  their  rented  farms.    This  was  notably  the 


FARM  OWNERSHIP  AND  TENANCY  IN  UNITED  STATES    269 

case  with  farms  located  near  county  lines.  Such  owners  can 
hardly  be  classed  as  non-residents,  and  the  very  small  per  cent 
of  rented  farms  owned  by  non-resident  landlords  would  have 
been  still  further  reduced  if  it  had  been  practicable  to  exclude 
such  owners. 

"  The  Western  division  had  the  smallest  proportion  of  rented 
farms  whose  owners  resided  in  the  county  where  their  rented 
farms  were  located.  .  .  .  The  South  Central  and  South 
Atlantic  divisions  had  the  largest  proportion  of  owners  residing 
in  the  county  where  their  rented  farms  were  located.  .  .  . 
The  North  Central  division  had  the  largest,  and  the  Western 
the  next  largest,  proportion  of  rented  farms  with  owners  residing 
outside  of  the  state."  ^ 

The  character  of  the  landlord  has  great  significance  when 
viewed  from  the  standpoint  of  the  tenant  farmer  who  hopes 
to  rise  to  the  position  of  a  landowning  farmer.  Land  leased  by 
the  retired  farmer  is  not  held  out  of  the  market  for  many  years, 
because  of  the  limits  set  to  Hfe.  Upon  the  death  of  the  retired 
farmer,  if  not  at  an  earher  date,  the  land  is  divided  among  heirs 
or  sold  to  settle  the  estate.  This  brings  land  upon  the  market 
and  helps  those  who  inherit  the  proceeds  to  buy  farms.  Per- 
manent landed  estates  managed  by  a  landlord  class  keep  land 
oflf  the  market  so  far  as  tracts  of  a  size  which  a  small  farmer 
can  buy  are  concerned,  and  the  influence  of  inheritance  is  to 
maintain  the  landlord  class.  The  permanent  landlord  class 
trained  to  manage  estates  operated  by  tenants  is,  however,  not 
without  its  redeeming  feature,  as  any  one  will  conclude  who 
studies  the  present  methods  of  operating  landed  estates  in  the 
regions  of  negro  tenants  in  the  South  to-day.  Trained  land- 
lords with  large  estates  are,  as  a  rule,  more  agreeable  for  a 
tenant,  white  or  black,  to  deal  with  than  are  the  retired  farmers 
who  enter  the  landlord  class  for  a  few  years  late  in  life. 

»  Twelfth  Census  of  the  United  States,  1900,  Vol.  V,  p.  Ixxxvii. 


CHAPTER  XXn 

FORMS  OF  LAND   TENURE  IN  THE  UNITED   STATES 

IS   A   CERTAIN   AMOUNT   OF   TENANCY   A   GOOD   THING  ? 

In  the  discussion  of  the  size  of  farms  it  was  noted  that  for  a 
given  farmer  engaged  in  a  given  type  of  farming  at  a  given 
stage  in  his  own  development,  and  with  given  conditions  with 
respect  to  wages,  interest,  land  values,  and  prices  for  his  prod- 
ducts,  there  is  a  size  of  farm  which  will  pay  him  best.  The 
question  now  to  be  taken  up  relates  to  the  various  ways  in  which 
he  can  get  the  use  of  the  amount  of  land  he  finds  it  most  profit- 
able for  him  to  operate. 

Few  young  farmers  are  financially  able  to  own  the  amount  of 
land  they  can  operate  to  best  advantage.  If  each  man  operated 
the  land  he  is  capable  of  owning,  many  young  farmers  would 
be  operating  farms  too  small  for  their  energies,  and  many  old 
farmers  would  have  in  hand  far  more  land  than  they  could 
utiUze  advantageously,  to  the  loss  of  the  young  farmer,  the  old 
farmer,  and  the  people  of  the  nation  who  consume  farm 
products. 

Farm  tenancy  is  an  institution  which  provides  for  getting  the 
land  into  the  hands  of  those  who  are  in  a  position  to  cultivate  it, 
but  who  are  unable  to  buy  farms.  In  its  best  forms,  tenancy 
in  a  limited  amount  may  be  a  good  thing.  In  igio  there  were 
2,354,676  or  37  per  cent  of  the  farmers  of  the  United  States 
reported  as  tenants  who  owned  none  of  the  land  they  farmed, 
and  593,825  or  9.3  per  cent  who  leased  part  of  the  land  they 
cultivated.  Thus,  it  would  seem  that  nearly  half  of  the  farmers 
are  using  tenancy  as  a  means  of  securing  the  use  of  the  land 
they  feel  capable  of  operating,  but  which  they  are  not  yet  able 
to  own.  It  is,  therefore,  a  matter  of  great  importance  that  the 
methods  of  leasing  land  be  such  as  will  be  conducive  to  good 

S70 


FORMS  OF  LAND  TENURE  IN  THE  UNITED   STATES      271 

farming  and  to  the  well-being  of  the  tenant  farmers  and  to  the 
nation  as  a  whole. 

A  large  proportion  of  the  tenant  farmers  are  young  men  who 
are  in  the  process  of  earning  enough  money  to  buy  a  farm. 
This  is  especially  the  case  in  the  Northern  States.  In  Illinois, 
for  example,  nearly  44  per  cent  (43.77)  of  farm  homes  which 
were  rented  were  occupied  by  persons  under  thirty-five  years 
of  age,  whereas  less  than  15  per  cent  of  those  owning  their  farm 
homes  were  under  thirty-five  years  of  age. 

The  owners  of  rented  land  are  quite  generally  older  farmers 
who  have  retired  or  who  have  more  land  than  they  wish  to 
farm ;  80  per  cent  of  the  owners  of  rented  land  have  but  one 
farm  let  to  tenants,  11.4  per  cent  have  but  two,  5.4  per  cent 
have  three  or  four,  2.3  per  cent  have  five  to  nine,  .7  per  cent  have 
ten  to  nineteen,  .2  per  cent  have  twenty  or  more  farms.  Taking 
the  United  States  as  a  whole  the  large  estate  made  up  of  rented 
farms  is  the  exception  and  the  landowner  with  one  or  two 
farms  to  rent  is  the  rule.  In  a  vast  number  of  cases  the  tenant 
is  the  son  or  son-in-law  of  the  landlord.  At  the  time  when  the 
parents  are  ready  to  retire  from  the  active  duties  the  farm 
is  usually  turned  over  to  one  member  of  the  family  on  a  tenant 
basis,  with  the  expectation  that  in  time  title  to  the  farm  will  be 
secured  by  the  tenant  and  he  will  become  the  owner  of  the  farm. 

While  tenancy  is  common  at  the  present  time  and  has  been 
present  in  the  United  States  since  the  beginning  of  our  nation,  it 
has  ever  been  looked  upon  merely  as  a  stepping  stone,  a 
temporary  means  of  acquiring  the  use  of  land,  and  not  as  a 
permanent  condition  for  any  individual.  The  statistics  show 
an  increase  in  the  percentage  of  tenancy,  however,  and  it  appears 
that,  on  the  average,  farmers  grow  older  as  tenants  than  they 
did  when  land  values  were  lower.  One  important  subject 
of  consideration  relates  to  the  means  of  maintaining  the  move- 
ment from  tenancy  to  ownership.  This  will  receive  especial 
consideration  in  a  later  chapter.  In  this  chapter  especial 
attention  will  be  given  to  the  methods  of  renting  land  with  a 
view  to  the  right  use  of  the  land  and  to  the  equitable  distribution 
of  the  products  of  the  land. 


272  AGRICULTURAL  ECONOMICS 

Points  to  be  considered  in  renting  land.  The  first  point  to 
be  considered  by  the  landlord  is  the  character  of  the  tenant 
to  whose  care  he  is  to  commit  his  farm.  Honesty  is  the  first 
essential,  without  which  the  farm  may  be  damaged  within  a 
year  to  an  amount  greater  than  the  annual  rent. 

Young  men  who  desire  to  succeed  as  tenant  farmers  cannot 
have  the  importance  of  honesty  too  strongly  impressed  upon 
them.  The  efficient  young  man  who  is  honest  finds  no  difficulty 
in  gaining  control  of  land  and  capital,  but  no  one  with  capital 
will  have  anything  to  do  with  a  dishonest  tenant  if  he  knows  him 
and  can  get  any  one  else.  Many  men  do  things  which  they 
count  very  shrewd,  but  which  at  once  puts  them  in  the  class 
of  men  who  have  to  be  watched,  and  it  is  a  general  principle 
that  the  greater  the  risk  the  higher  the  rate  of  profit  which 
the  capitalist  should  demand.  The  honesty  of  the  tenant  in- 
sures the  landlord  against  the  losses  he  is  in  danger  of  sus- 
taining if  the  tenant  is  dishonest.  The  landlord  can  afford,  and 
is  usually  willing,  to  pay  a  liberal  premium  for  this  insurance. 

Efficiency  is  equally  important.  If  the  farm  is  let  on  shares, 
the  income  of  the  landlord  is  dependent  upon  the  efficiency  of  the 
tenant.  If  let  for  cash,  it  is  much  better  to  have  a  capable 
tenant  who  can  pay  the  rent  with  ease,  since  the  reputation  of 
the  farm  depends  upon  the  success  of  the  tenant.  Every  tenant 
has  a  record,  —  look  into  this  record  before  making  a  contract. 

The  tenant  should  be  in  possession  of  a  requisite  amount  of 
capital  to  operate  the  farm  effectively.  This  amount  will  de- 
pend upon  the  type  of  farming  and  the  form  of  tenure.  It 
is  a  common  practice  for  the  landlord  to  supply  a  large 
proportion  of  the  operating  capital  where  he  is  assured  of  the 
honesty  and  efficiency  of  the  tenant.  It  does  not  make  so 
much  difference  who  provides  the  capital,  the  important  thing 
is  that  the  capital  certainly  be  provided. 

The  Farm  and  the  Landlord 

In  choosing  a  farm,  consider  its  suitabiUty  to  the  type  of 
farming  most  congenial  to  the  tenant,  location  with  respect  to 
markets,  schools,  etc.,  the  qualities  of  the  soil,  the  arrangement 


FORMS  OF  LAND  TENURE  IN  THE  UNITED   STATES      273 

of  the  fields  and  buildings  for  economy  of  labor,  the  size  of 
the  farm,  whether  it  will  give  full  scope  to  the  energy  of  the 
tenant,  the  water  supply,  and  the  sanitary  conditions  of  the 
home.  Ascertain  if  there  has  been  any  sickness  in  the  family 
or  disease  among  the  animals  of  the  former  tenant.  The  fair- 
ness of  the  rent  asked  should  be  looked  into  by  the  tenant. 
By  making  inquiry  of  the  outgoing  tenant,  the  neighbors,  the 
thrasher  man,  and  the  operator  of  the  local  creamery  or  cheese 
factory,  the  prospective  tenant  can  get  information  on  many 
of  these  points  and  at  the  same  time  ascertain  the  amount  of 
the  income,  the  expenditures,  and  other  factors  which  will  show 
the  possibilities  of  the  farm. 

The  farm  being  found  satisfactory,  make  sure  that  the  land- 
lord is  a  fair-minded  man,  capable  of  giving  good  advice  but 
not  overfree  with  his  suggestions  nor  overinsistent  upon  his 
own  notions  being  followed  in  detail.  A  nagging  landlord 
makes  the  day  long  and  the  work  tiresome. 

The  landlord  should  try  to  see  the  situation  from  the  view- 
point of  the  tenant  as  well  as  his  own  and  then  strive  to  be 
fair.  This  will  pay  not  only  in  the  satisfaction  that  results 
from  being  decent  with  one's  fellow-men,  but  also  in  greater 
returns  from  the  farm.  The  landlord  who  takes  advantage  of  a 
tenant  who  is  striving  to  do  the  right  thing,  and  "  grinds  him 
down,"  may  gain  a  few  cents  in  the  beginning,  but  he  will 
lose  dollars  in  the  end.  He  will  gain  the  reputation  of  being 
a  grasping  landlord.  Good  tenants  will  avoid  him,  for  it  is 
true  not  only  that  the  efficient  farmers  tend  to  get  the  most 
productive  land,  but  also  that  the  honest  tenant  tends  to  get 
the  honest  landlord. 

What  the  lease  should  contain.  The  lease  should  contain  a 
description  of  the  land  (the  description  found  in  the  deed  to  the 
land),  the  buildings,  and  such  other  property  belonging  to  the 
landlord  as  may  be  involved  in  the  agreement. 

Uses  oj  property.  The  uses  and  the  limitations  upon  the 
uses  to  which  the  property  may  be  put  by  the  tenant  should 
be  stated  specifically  in  the  contract.  For  example,  the  land 
to  be  retained  in  permanent  pasture  should  be  described,  the 


274  AGRICULTURAL  ECONOMICS 

area  to  be  kept  in  meadow  stated,  the  crops  which  are  not 
to  be  grown  named,  the  uses  named  for  which  trees  may  be 
cut,  etc. 

Disposition  of  products.  It  is  through  the  regulation  of 
what  crops  are  to  be  produced  upon  the  farm,  and  the  forms 
in  which  the  products  of  the  farm  are  to  be  disposed  of,  that 
the  farming  may  be  directed  along  lines  least  exhausting  to  the 
soil.  In  general,  tenant  farmers  are  too  much  inclined  to  sell 
grain  and  hay  rather  than  live  stock  and  dairy  products.  This 
is  partly  due  to  the  lack  of  capital  on  the  part  of  tenant.  Re- 
strictive clauses  in  leases  which  require  that  all  hay,  straw,  corn 
fodder,  corn,  etc.,  be  fed  upon  the  farm  should  be  accompanied 
with  provisions  enabling  the  tenant  to  secure  the  necessary 
animals  to  consume  these  products. 

Use  oj  manure  made  on  thejarm.  The  manure  made  upon 
the  farm,  from  feeds  produced  thereon,  belongs  to  the  land, 
and  in  no  case  should  any  tenant  be  allowed  to  remove  this 
manure  from  the  land.  Danger  from  this  source  arises  most 
commonly  in  the  case  of  farmers  who  own  a  farm  and  hire  ad- 
ditional land.  Land  leased  in  this  way  should  receive  its  pro 
rata  share  of  the  manure. 

Contracts  usually  provide  that  the  tenant  shall  spread  all 
manure  upon  the  land  at  such  points  as  the  owner  shall  direct. 
This  clause  is  more  or  less  useless,  as  a  new  tenant  will  gladly 
haul  all  the  manure  he  can  find,  while  a  tenant  who  expects  to 
leave  before  another  cropping  season  cannot  easily  be  forced 
to  haul  manure  for  his  successor.  The  obvious  remedy  is  to  pay 
the  tenant  for  hauling  the  manure  from  which  he  is  to  derive 
no  benefit  or  else  not  expect  him  to  perform  this  service. 

Purchase  of  feed  and  fertilizers.  In  order  that  the  tenant 
be  not  discouraged  in  buying  feeds  and  fertilizers  to  be  utilized 
upon  the  farm  the  contract  should  provide  for  compensation  to 
the  tenant  upon  the  termination  of  his  lease  for  the  unexhausted 
supplies  of  fertility  placed  in  the  soil  from  these  sources.  The 
payment  for  such  improvements  should  never  be  for  more  than 
the  benefit  to  be  derived  by  the  incoming  tenant.  Unwise 
expenditures  should  be  the  loss  of  him  who  makes  them. 


FORMS  OF  LAND  TENURE  IN  THE  UNITED  STATES      275 

Destruction  of  noxious  weeds.  Great  care  should  be  taken 
to  provide  in  the  contract  for  the  cutting  of  all  noxious  weeds 
before  they  mature  their  seeds.  A  clause  should  be  inserted 
providing  that  in  case  the  tenant  neglects  to  destroy  seed-bearing 
weeds  in  proper  season  the  landlord  may  enter  with  the  necessary 
help,  destroy  the  weeds,  and  charge  the  cost  to  the  tenant. 

In  the  case  of  Canada  thistles  and  quack  grass,  provision 
should  be  made  against  the  spreading  of  their  roots  over  the 
fields.  These  plants  may  have  got  a  start  along  a  fence  rov;-  or 
along  a  ditch  where  the  land  has  not  been  cultivated  for  years. 
By  plowing  one  furrow  closer  than  has  been  the  practice  in  a 
place  of  this  kind  a  great  quantity  of  the  roots  may  be  loosened 
and  dragged  out  over  the  field.  Danger  of  spreading  these 
plants  should  be  guarded  against  strenuously.  The  saving  of 
the  land  from  the  encroachment  of  noxious  weeds  is  even  more 
important,  if  there  be  any  difference,  than  the  avoidance  of  soil 
exhaustion. 

Where  a  state  law  requires  the  destruction  of  noxious  weeds 
it  should  be  strenuously  enforced.  It  is  the  duty  of  every 
landlord  and  of  every  tenant  to  see  that  such  laws  are  obeyed. 

The  landlord  whose  farm  is  foul  with  weeds  should  not  ex- 
pect the  tenant  who  was  not  to  blame  for  this  condition  of  affairs 
to  clear  the  farm  from  these  pests  without  compensation. 
Where  this  work  is  not  performed  as  a  part  of  the  regular  culture 
of  the  crops,  the  tenant  should  receive  compensation  in  cash  in 
proportion  to  the  service  rendered.  The  landlord  who  does  not 
spend  money  in  fighting  the  encroaching  army  of  noxious  weeds 
will  soon  accept  a  much  lower  rent.  Where  the  destruction  of 
weeds  is  a  regular  farm  operation  necessary  to  the  production 
of  a  crop  the  tenant  should  not  expect  other  compensation  than 
that  coming  from  increased  production.  The  landlord  whose 
farm  is  clear  of  weeds  can  easily  secure  enough  more  rent  to 
make  his  activities  and  expenditures  in  the  destruction  of  weeds 
very  profitable. 

Value  of  a  tidy  farm.  The  landlord  should  take  great  care 
to  provide  neat  farm  buildings  and  fences.  The  tenant  should 
agree  to  maintain  a  tidy  appearance  about  the  house,  the  barns, 


276  AGRICULTURAL  ECONOMICS 

the  feed  lots,  the  fence  rows,  and  every  other  part  of  the  farm. 
There  is  a  considerable  advertising  value  in  good  appearances 
which  should  not  be  disregarded.  Where  it  is  not  profitable  in 
dollars  and  cents  it  pays  abundantly  in  the  satisfaction  that 
comes  from  the  greater  degree  of  contentment  and  self-respect 
enjoyed  by  the  farmer  and  his  family. 

New  buildings  and  fences.  In  the  construction  of  new 
fences  and  buildings  there  seems  to  be  no  settled  practice.  In 
some  cases  the  landlord  provides  the  material,  performs  all  of 
the  work,  and  pays  for  the  board  of  the  workmen,  the  tenant 
hauling  the  material  from  the  nearest  station  and  boarding  the 
workmen  at  a  fixed  rate.  In  other  cases  the  tenant  performs  all 
of  the  unskilled  labor  and  boards  the  skilled  laborers  without 
charge  while  making  the  improvement. 

Repairs  on  fences  and  buildings.  The  common  practice  in 
all  forms  of  leases  in  the  Northern  States  is  for  the  landlord  to 
furnish  the  material  and  the  tenant  to  do  all  the  work  required 
in  making  ordinary  repairs  on  fences  and  buildings.  In  some 
cases  a  distinction  is  made  between  the  "  inside  "  fences  and 
the  outside  or  "  Hne  fences,"  the  landlord  making  the  repairs 
on  the  latter  and  the  tenant  doing  the  work  required  in  making 
repairs  on  the  former. 

Another  plan  which  has  been  found  more  satisfactory  in  some 
instances  is  for  the  owner  of  the  land  to  pay  the  tenant  a  fixed 
sum  per  day  for  time  expended  under  the  owner's  supervision 
in  the  construction  and  repair  of  fences  and  buildings  and  ad- 
justing the  rent  accordingly.  This  may  result  in  a  more  cheerful 
service  of  the  tenant  in  working  on  fences  and  buildings. 

Some  experienced  landlords  require  the  tenants  to  make  good 
at  their  own  expense  damages  done  to  gates,  barn  doors,  pumps, 
etc.,  where  the  wear  and  tear  is  likely  to  be  very  great  with  a 
careless  tenant  and  very  httle  with  a  careful  one.  The  practice 
on  some  estates  is  for  the  landlord  to  furnish  the  parts  of  the 
pump  and  the  windmill  which  are  subject  to  little  wear,  and  to 
require  the  tenant  to  furnish  the  wearing  parts.  This  was  sug- 
gested by  the  difl5culty  met  with  in  getting  tenants  to  oil  the 
windmill.    If  the  tenant  owns  the  gearing  and  wheel  of  the 


FORMS  OF  LAND  TENURE  IN  THE  UNITED  STATES      277 

windmill  he  is  less  likely  to  let  the  wheel  run  loose  in  a  high 
wind  or  let  it  run  for  weeks  at  a  time  without  oil. 

Fence  posts.  Where  post  timber  is  found  in  the  farm  wood- 
lot  it  is  common  practice  for  the  tenant  to  make  the  posts  needed 
for  repairs.  The  main  difficulty  arises  from  the  fact  that  tenants 
do  not  often  make  the  posts  early  enough  to  give  them  time  to 
season  before  they  are  put  into  the  ground.  The  remedy 
suggested  by  one  landlord  is  to  keep  a  supply  of  posts  on  hand 
on  the  farm  all  the  time  and  require  the  tenant  to  make,  under 
the  direction  of  the  landlord,  as  many  posts  each  year  as  he  has 
found  occasion  to  use.  This  problem  is  easily  solved  where  the 
landlord  looks  after  all  repairs  and  pays  the  tenant  for  his 
labor  in  making  repairs. 

Firewood.  It  is  the  common  practice  where  there  is  a  wood- 
lot  on  the  farm,  to  allow  the  tenant  to  secure  firewood  free  of 
charge.  It  is  often  prescribed  that  only  dead  and  down  timber 
may  be  taken  for  this  purpose.  In  any  case  growing  trees 
should  not  be  cut  until  all  dead  timber  has  been  taken.  It  is 
usually  prescribed  that  all  tops  or  slashings  not  taken  for  firewood 
shall  be  piled  and  burned  by  the  tenant. 

The  road  tax.  The  general  rule  is  for  the  tenant  to  work  or 
pay  the  road  tax.  It  is  often  stated  that  in  return  for  this  service 
the  tenant  shall  be  allowed  to  secure  firewood  from  the  farm, 
although  in  some  cases  where  this  latter  privilege  is  not  granted 
the  tenant  is  required  to  work  the  road  tax  without  any  special 
compensation  beyond  the  use  he  gets  of  the  road. 

Duration  of  leases.  There  is  perhaps  more  land  let  for 
one  year  at  a  time  or  from  year  to  year,  than  on  any  other  terms 
in  the  Corn  Belt,  and  yet  three-year  leases  and  five-year  leases 
are  very  common,  and  leases  for  two  years  and  for  four  years 
have  occasionally  been  noted.  It  is  not  uncommon  to  lease  a 
farm  for  a  period  of  three  or  five  years,  and  then  allow  the  tenant 
to  remain  on  the  farm  from  year  to  year  after  this  period  has 
elapsed,  in  case  this  is  agreeable  to  both  parties.  Another 
method  is  to  let  the  farm  for  one  year  with  the  agreement  that 
if  the  parties  are  both  satisfied  with  the  arrangement  the  first 
year,  the  contract  becomes  good  for  two  or  four  more  years. 


278  AGRICULTURAL  ECONOMICS 

It  is  generally  agreed  among  landlords  that  a  tenant  will  do 
better  if  he  can  plan  to  remain  for  three  or  five  years,  than  if 
he  is  uncertain  how  long  he  may  remain.  One  year  is  required 
for  the  tenant  to  become  acquainted  with  the  farm. 

On  a  dairy  farm,  where  stock  is  let  with  the  land,  it  is  much 
better  that  the  same  man  should  have  charge  of  the  cows  for 
a  long  period  than  for  the  tenants  to  be  changing  from  year 
to  year.  In  case  the  cows  are  owned  in  partnership  it  is  very 
unsatisfactory  to  be  dividing  the  herd  every  year.  The  follow- 
ing quotation  from  a  letter  from  a  Wisconsin  farmer,  who  lets 
land  on  shares  and  furnishes  a  part  of  the  stock,  will  help  to 
put  this  matter  in  a  clear  light : 

"If  I  knew  the  man  to  be  a  good  one,  and  one  that  would  suit,  I 
would  prefer  to  let  for  a  term  of  years,  say  from  three  to  five  years, 
as  a  man  only  gets  started  the  first  year,  for  he  has  the  farm  to  learn, 
and  it  is  not  best  to  be  changing  stock  every  year.  I  think  if  a  tenant 
knows  this  to  be  his  home,  he  will  take  more  interest  in  keeping  up 
the  place.  But  if  you  are  not  sure  the  man  wUl  suit,  or  be  satisfied 
to  stay,  I  should  rent  for  one  year,  as  it  is  very  easy  to  continue  the 
old  contract  or  make  a  new  one,  as  the  case  requires." 

If  there  is  any  difference,  there  seems  to  be  more  reason  for 
letting  land  for  a  number  of  years  when  let  for  cash  than  when 
on  shares.  It  is  thought  that  the  tenant  will  take  much  better 
care  of  the  land  when  he  has  it  for  a  number  of  years. 

The  system  of  crop  rotation  should  be  taken  into  account  in 
determining  the  period  of  the  lease,  so  that  the  tenant  may  have 
time  to  complete  the  rotation.  It  is  a  well-recognized  fact  that 
where  the  land  is  so  operated  as  to  prove  most  profitable  in  the 
long  run,  the  tenant  is  required  to  make  investments  in  the  form 
of  labor  in  improving  the  tilth  of  the  soil,  in  hauling  manure,  and 
sowing  grass  seeds,  on  which  he  can  reaUze  the  full  return  only 
after  a  number  of  years.  For  this  reason  it  is  thought  best  to  let 
land  for  several  years  at  a  time. 

In  Scotland  this  long  ago  led  to  the  introduction  of  19-  and 
2 1 -year  leases,  yet  these  very  long-term  leases  have  their  objec- 
tionable features  even  in  Scotland,  where  the  land  is  held  in 
large  estates  by  rich  men  who  have  no  thought  of  anything 


FORMS  OF  LAND  TENURE  IN  THE  UNITED  STATES      279 

else  than  letting  their  land  to  tenants.  In  the  United  States 
landowners  are  so  generally  retired  farmers,  whose  farms  are 
likely  to  be  sold  in  the  course  of  a  few  years  to  men  who  will 
farm  their  own  land,  that  very  long-term  leases  are  out  of  the 
question.  Compensation  for  unexhausted  improvements  is  the 
remedy  for  many  of  the  evils  of  short-term  leases. 

Amount  of  rent  to  be  paid.  The  rent  of  a  farm  is  the  price 
paid  for  its  annual  use  either  in  the  form  of  money  or  products. 
The  amount  which  should  be  paid  depends  upon  the  usefulness 
of  the  land  and  the  scarcity  of  farm  land  of  the  grade  in  question. 
It  is  not  always  an  easy  matter  to  ascertain  exactly  what  the 
"  square  deal  "  is.  The  amount  of  rent  which  should  be  given 
for  the  use  of  the  land  varies  with  the  fertility  of  the  land,  the 
local  market  prices  of  products,  the  distance  and  character  of  the 
roads  to  the  markets,  the  length  of  the  term,  the  restrictions 
under  which  the  land  is  to  be  farmed,  and  the  probability  that 
the  tenant  will  improve  a  farm  or  bring  about  its  deterioration. 

In  figuring  on  the  amount  which  he  can  afford  to  pay,  the 
tenant  should  compare  the  opportunities  offered  and  the  rents 
asked  for  as  many  farms  as  possible  in  order*  to  select  the  farm 
which  will  enable  him,  after  paying  the  rent  and  other  expenses, 
to  have  left  the  largest  possible  returns  for  his  own  labor  and 
capital. 

No  tenant  should  sign  a  contract  until  he  sees  clearly  sources 
of  income  over  and  above  the  amount  of  the  rent,  sufficient  to 
pay  all  annual  expenses  for  labor  and  equipment,  support  his 
family  in  accordance  with  the  standards  of  the  community,  and 
leave  a  surplus.  This  surplus  is  the  ground  for  hope  of  be- 
coming the  owner  of  a  farm.  Every  honest  and  efficient  farmer 
will  be  able  to  make  a  surplus  from  which  to  save  if  he  is  on 
the  right  farm  on  the  right  terms.  But  this  statement  does 
not  give  ground  for  the  belief  on  the  part  of  every  tenant  who 
makes  no  surplus  that  his  rent  is  too  high.  Before  coming  to 
such  a  conclusion  let  the  tenant  makv,  sure  that  he  is  an  efficient 
farmer.  Let  him  compare  his  farming  in  every  detail  with 
that  of  other  men  who  are  making  a  surplus,  and  this,  if  care- 
fully done,  will  point  to  the  true  cause  of  the  lack  of  profit, 


28o  AGRICULTURAL  ECONOMICS 

whether  it  be  the  terms  of  the  contract  or  the  methods  of 
farming. 

The  landlord  should  not  be  overzealous  in  driving  a  hard 
bargain.  The  landlord  who  drives  the  hardest  bargain  often 
finds  himself  beaten  in  the  end.  A  farm,  like  a  horse  or  a  cow, 
is  more  or  less  attractive  and  more  or  less  useful  according  as 
it  is  well  or  ill  treated.  Under  proper  management  land  may 
be  made  to  increase  in  productivity.  It  is  equally  true  that  ill 
treatment  may  greatly  reduce  the  fertility  of  the  land.  111 
treatment  is  the  more  to  be  feared  for  the  reason  that  in  this 
way  a  tenant  may  sometimes  increase  his  profits  for  the  one 
year.  Hence  the  following  quotations,  from  men  who  have 
had  long  experiences  in  letting  farms,  are  in  point :  "If  you 
try  to  get  more  than  a  fair  rent,  the  tenant  will  take  more 
than  the  difference  out  of  the  property ;  "  and  again,  "  Do  not 
beat  a  tenant  before  he  comes,  or  he  will  beat  you  afterwards ; 
give  him  a  good  *  lay,'  and  in  the  long  run  it  will  pay  you  best ; 
an  honest,  fair  way  will  always  win  in  the  long  run." 

The  tenant  who  makes  the  highest  bid  is  not  always  the  most 
profitable  man  to  have  on  the  farm.  Landowners  have  too  often 
overlooked  the  importance  of  having  a  thorough  understand- 
ing as  to  the  way  in  which  the  land  is  to  be  used  and  the  con- 
dition in  which  the  land  and  the  buildings  are  to  be  left  at  the 
end  of  the  tenancy.  A  tenant  can  well  afford  to  offer  an  extra 
high  rent  for  the  use  of  the  land  for  a  year  or  two  if  he  is  free 
to  plow  up  the  rich  old  pastures,  produce  the  most  exhausting 
crops,  and  take  no  care  to  leave  the  farm  in  condition  for  mak- 
ing a  profit  in  the  future.  No  landlord  can  afford  to  sacrifice 
his  capital  for  the  sake  of  reaping  a  high  rate  of  interest  on  his 
investment  for  a  short  time.  It  is  very  important,  therefore, 
that  the  conditions  of  farming  should  be  such  as  will  guarantee 
that  the  farm  will  be  returned  to  the  landlord  in  as  good  condi- 
tion as  it  was  at  the  beginning  of  the  tenancy.  This  is  not  a 
matter  that  can  be  provided  for  perfectly  in  the  contract,  even 
if  the  tenant  gives  bond.  To  have  to  appeal  to  the  law  to  en- 
force one's  rights  is  always  undesirable.  It  is  better  to  take  a 
smaller  rent  from  a  fair-minded  man  who  can  be  trusted  to 


FORMS  OF  LAND  TENURE  IN  THE  UNITED  STATES      28 1 

do  the  right  thing,  than  to  take  chances  on  a  man  of  doubtful 
character.  In  European  countries  where  state-owned  lands  are 
let  to  tenants  the  principle  is  well  estabUshed  that  farms  will 
not  necessarily  be  let  to  the  highest  bidder. 

In  share  tenancy  the  ability  of  the  tenant  to  manage  a  farm 
is  a  matter  which  should  receive  more  attention  on  the  part  of 
the  landlord  than  the  exact  terms  of  the  contract.  On  a  given 
farm,  stocked  in  a  given  way,  one  tenant  will  be  able  to  sell 
$3000  worth  of  products  each  year,  and  keep  the  farm  in  as 
good  condition  as  another  tenant  who  may  not  be  able  to  sell 
more  than  $2500  worth  of  products.  If  the  land  is  let  for 
one-half  of  the  proceeds,  this  will  make  a  difference  of  $250 
in  the  income  of  the  landlord.  In  order  to  get  the  better  ten- 
ant, therefore,  the  landlord  can  iafford  to  be  liberal  in  making 
the  bargain.  Even  where  the  share  of  the  product  to  be  re- 
ceived by  the  landlord  is  fixed  by  custom,  there  are  many  points, 
such  as  the  landlord's  share  of  the  poultry,  the  paying  of  the 
thrashing  bill,  the  twine  bill,  the  amount  of  free  garden  land, 
the  free  use  of  milk  for  the  tenant's  family,  the  colts,  the  horse 
feed,  etc.,  regarding  which  the  landlord  and  the  tenant  must 
bargain.  Here  is  the  opportunity  for  the  owner  to  be  liberal 
and  get  a  good  tenant. 

Where  land  is  let,  in  accordance  with  the  customs  of  the  dis- 
trict, for  one-half  of  the  proceeds,  it  is  often  more  important 
to  the  tenant  that  he  should  look  out  for  the  best  farm,  owned 
by  an  agreeable  and  far-sighted  landlord,  than  to  stand  out 
too  strongly  on  any  small  matter  of  detail  as  to  what  the  land- 
lord shall  furnish.  The  same  labor  and  capital  may  easily 
bring  a  return  20  per  cent  larger  on  one  farm  than  on  another  in 
the  same  neighborhood,  and  this  will  more  than  compensate  for 
being  liberal  in  matters  of  detail. 

When  the  landlord  seeks  the  best  tenant  he  can  get,  and  the 
tenant  seeks  the  best  farm  he  can  get,  the  result  is  Hkely  to 
be  that  the  best  tenant  will  be  on  the  best  land,  and  while  the 
tenant  profits  by  being  on  the  better  land,  the  landlord  profits 
equally  by  having  an  excellent  tenant  on  his  farm.  Large  num- 
bers of  farmers  have  mentioned  this  point,  and  they  generally 


282  AGRICULTURAL  ECONOMICS 

agree  that  the  best  tenants  do  get  the  best  rented  farms,  and 
that  the  inefficient  tenants  have  to  take  what  they  can  get, 
which  is  usually  the  more  sterile  or  run-down  farms.  One  land- 
lord expressed  himself  as  follows  on  this  point : 

"If  you  mean  by  the  best  tenant,  the  one  who  takes  proper  care  of 
the  soil,  and  then  makes  the  most  money,  one  year  with  another,  the 
best  tenants  are  on  the  best  land.  A  good  tenant  gets  a  good  farm, 
and  he  can  hold  it.  The  inefficient  tenant  is  always  looking  for  a  farm 
and  the  landowners  with  good  farms  want  only  the  best  tenants ;  so 
the  inefficient  tenants  are  crowded  to  the  poorer  grades  of  land." 

Time  of  paying  rent.  The  lease  should  be  most  explicit  as 
to  when  payment  of  rent  is  to  be  made.  Where  the  land  is  let 
for  a  share  of  the  proceeds,  the  common  practice  is  to  divide  the 
money  as  soon  as  the  sales  are  made.  It  is  very  common  for 
the  division  to  be  made  at  the  creamery  or  cheese  factory,  and 
one  check  is  sent  to  the  landlord  and  another  to  the  tenant. 
Where  land  is  let  for  cash,  the  practice  varies  widely,  and  yet 
there  is  a  tendency  to  make  the  time  of  payment  conform  to 
the  time  when  the  tenant  is  likely  to  make  sales.  One-half  at 
the  middle  of  the  year  and  the  remainder  at  the  end  of  the 
year  is  a  common  practice,  with  the  modification  that  in  the  case 
of  the  last  year  of  the  tenancy  all  payments  shall  be  made  one 
month  before  the  end  of  the  year.  Monthly  payments  are  be- 
ing introduced  on  dairy  farms  which  are  let  for  cash.  This 
conforms  to  the  time  of  receiving  payments  for  the  milk  and 
grows  very  naturally  out  of  a  change  from  the  share  system  to 
the  cash  system  on  dairy  farms. 

Guarantee  that  the  rent  shall  he  paid.  In  many  of  the  North 
Central  states,  laws  have  been  passed  during  recent  years  which 
declare  that  the  landlord  shall  have  a  Hen  for  his  rent  upon 
all  crops  grown  upon  the  leased  premises.  In  others  there  are 
no  statutory  laws  providing  for  a  landlord's  lien,  although,  of 
course,  a  lien  can  be  created  by  agreement  of  the  parties,  if 
properly  made,  and  it  is  quite  common  to  have  a  clause  in  the 
lease  which  secures  the  payment  of  the  rent.  In  some  cases 
the  owner  of  the  land  requires  that  all  of  the  products  shall 
remain  his  property  until  the  rent  is  paid,  and  in  some  cases  the 


FORMS  OF  LAND  TENURE  IN  THE  UNITED  STATES      283 

tenant  is  authorized  by  the  landlord  to  market  the  products  in 
sufficient  quantity  to  pay  the  rent,  after  which  he  may  dispose 
of  the  remainder  of  the  produce  as  he  pleases.  In  some  cases 
the  tenant  gives  a  chattel  mortgage  to  secure  the  payment 
of  the  rent. 

It  is  common  for  the  landlord  to  remit  a  part  of  the  rent  in  case 
of  a  great  disaster  over  which  the  tenant  had  no  control,  and 
which  makes  it  impossible  to  pay  the  rent  from  the  year's 
productions.  This  should  become  a  well-established  custom. 
Good  customs  do  much  to  insure  happy  relations  between  land- 
lords and  tenants.  The  best  landlords  realize  that  food  for  the 
family  of  an  honest,  industrious  tenant  should  come  before 
the  landlord's  rent.  Well-estabHshed  customs  impel  the  less 
well-disposed  landlords  to  Hve  up  to  the  standards  estabhshed 
by  the  better  landlords. 

Enforcing  the  agreements.  The  lease  should  provide  for  en- 
forcing the  contract.  Fines  are  sometimes  provided  in  case  of 
failure  to  conform  to  the  contract  either  by  omission  or  com- 
mission. It  is  sometimes  agreed  that  in  case  either  party  shall 
fail  to  perform  his  part  in  the  agreement,  as  illustrated  by  an 
example  of  the  destruction  of  weeds  by  the  tenant  or  the  making 
of  an  improvement  by  the  landlord,  the  other  party  may  hire  a 
third  party  to  carry  out  the  terms  of  the  agreement  and  charge 
the  costs  against  the  crop  or  against  the  rent,  as  the  case  may  be. 

It  should  be  provided  in  the  agreement  that  in  case  either 
party  fails  to  perform  his  part,  the  tenancy  may  be  brought  to  a 
close,  by  due  notice,  at  the  end  of  the  current  year.  As  a  rule 
it  is  unwise  to  be  strenuous  in  enforcing  the  terras  of  the  contract. 
In  case  either  party  fails  to  perform  his  part  in  the  contract  to 
such  an  extent  that  appreciable  loss  results,  it  is  better  to  bring 
the  contract  to  a  close. 

While  a  change  usually  results  in  some  loss,  it  is  better  than 
tolerating  excessive  negligence.  New  agreements  are  better 
than  old  agreements.  The  landlord  tries  harder  to  please  a  new 
tenant  than  an  old  one.  The  new  tenant  operates  under  a  new 
stimulus,  his  expectations  are  high,  and  his  work  moves  with 
renewed  energy. 


284  AGRICULTURAL  ECONOMICS 

Notice  to  terminate  lease.  Where  land  is  let  from  year  to 
year  or  for  one,  three,  or  five  years,  with  the  understanding  that 
the  tenant  may  remain  as  much  longer  as  it  is  mutually  agree- 
able, it  is  common  to  include  a  clause  in  the  lease  to  the  effect 
that  (after  the  fixed  period  has  elapsed)  in  case  either  party  de- 
sires to  bring  the  tenancy  to  a  close  at  the  end  of  the  year,  he 
must  give  the  other  party  written  notice  to  that  effect  ninety 
days  (sometimes  six  months)  prior  to  the  end  of  the  year.  In 
the  absence  of  any  notice,  the  contract  is  to  be  considered 
renewed  for  another  year. 


CHAPTER  XXIII 
FORMS  OF  LAND  TENURE  IN  THE  UNITED  STATES  (Continued) 

Share  versus  cash  rent.  Is  it  better  to  let  land  on  shares 
or  for  cash?  The  answer  to  this  question  depends  largely 
upon  the  amount  of  time  the  landlord  can  give  to  the  supervision 
of  the  farm  and  to  the  amount  of  money  and  ability  possessed 
by  the  tenant.  The  landlord  who  lets  land  on  shares  must  give 
much  attention  to  the  management  of  the  farm,  but  he  who  lets 
his  land  for  cash  need  give  little  attention  to  the  farm  beyond 
the  securing  of  the  right  tenant  under  proper  agreements. 
Share  tenancy  usually  yields  larger  returns  to  the  landlord  than 
cash  tenancy,  because  he  renders  more  service,  takes  more 
risk,  and  often  furnishes  more  of  the  capital. 

The  tenant  with  Httle  capital  and  but  httle  experience  in 
farming  finds  share  tenancy  better  than  remaining  a  hired  man. 
Compared  with  the  cash  tenant  he  is  more  dependent  and  may 
make  less  money,  but  if  he  lacks  the  capital  and  skill  to  succeed 
as  a  cash  tenant  he  will  find  share  farming  under  the  supervision 
of  a  landlord  who  has  been  a  successful  farmer  more  profitable, 
as  well  as  a  more  independent  life,  than  working  for  wages. 
For  many  young  farmers  a  period  as  share  tenant  under  the 
supervision  of  a  good  landlord  who  is  himself  a  successful  farmer 
is  a  most  valuable  apprenticeship  in  farm  management. 

Share  tenancy.  Share  tenancy  is  more  common  than  cash 
tenancy  in  the  United  States.  In  1910  there  were  1,399,923 
tenants  whose  entire  rent  was  paid  in  the  form  of  a  share  of 
the  product  or  a  share  of  the  proceeds.  There  were  128,466 
who  paid  rent  in  the  form  of  a  share  of  the  product  and  who  paid 
a  cash  rent  in  addition  usually  for  a  part  of  the  farm,  the  pro- 
ceeds of  which  were  not  shared  with  the  landlord.  There  were 
712,294  tenants  reported  as  paying  a  cash  rent  solely,  but  a 

28s 


286  AGRICULTURAL  ECONOMICS 

very  large  part  of  these  paid  a  fixed  quantity  of  produce,  for 
example  a  fixed  amount  of  cotton  is  paid  for  a  given  area  of 
cotton  land,  instead  of  a  fixed  amount  of  cash  rent. 

Share  tenancy  is  preferred  by  many  tenant  farmers  because  the 
risk  is  less  than  in  cash  tenancy.  The  thought  of  paying  a  fixed 
rent  whether  the  crop  is  large  or  small  and  whether  the  prices 
are  high  or  low  is  not  attractive  to  the  majority.  And  again, 
many  of  the  tenants  do  not  possess  sufficient  wealth  to  enable 
them  to  own  all  of  the  stock  necessary  to  operate  a  farm  on  a 
cash  basis. 

The  landlords  who  live  in  close  proximity  to  the  land  which 
they  let,  and  who  have  time  to  devote  to  its  supervision,  usually 
prefer  a  share  of  the  crop  because  they  find  it  more  profitable 
to  them.  The  share  system  is  more  profitable  to  the  landlords 
largely  because  of  the  close  supervision  which  they  give  to  the 
farms  let  on  shares.  Many  of  the  tenants  are  young  and  in- 
experienced, and  are  wilHng  to  leave  the  general  management 
of  the  farm  to  the  landlord,  who  is  very  Hkely  to  be  an  elderly 
farmer,  and  the  fact  that  he  has  a  farm  to  let  suggests  that  he 
has  been  a  successful  farmer.  All  tenants  are  not  so  willing 
to  be  directed  by  their  landlords,  but  if  they  pay  a  share  of  the 
products  as  rent  the  landlord's  right  to  give  advice  is  apparent 
and  is  a  well-established  custom,  whereas  under  cash  tenancy 
there  has  seemed  to  be  less  reason  why  the  tenant  should  be 
compelled  to  accept  interference  on  the  part  of  the  landlord. 
The  principle  being  established  that  the  landlord  has  a  right 
to  direct  more  or  less  definitely  the  operations  of  the  farm,  as  in 
the  case  of  share  tenancy,  the  landlord  has  little  difficulty  in  so 
directing  the  management  of  the  farm  as  to  preserve  the  fer- 
tihty  of  the  land.  The  choice  of  crops,  and  the  organization 
of  the  field-system  are  subjects  which  the  share  tenant  is  usually 
willing  to  leave  to  the  landlord,  and  in  many  cases  the  landlord 
controls  the  field  operations  in  the  minutest  detail.  For  ex- 
ample, the  depth  to  which  land  is  to  be  plowed,  the  time  of 
sowing,  planting,  harvesting,  and  the  number  of  times  a  field 
of  Indian  corn  should  be  cultivated  are  details  to  which  the 
landlord  often  gives  his  attention  under  this  system  of  letting 


FORMS  OF  LAND  TENURE  IN  THE   UNITED   STATES      287 

land.  The  landlord  is  willing  to  exert  himself  for  these  purposes 
because  his  profits  are  increased  by  such  activity. 

Another  reason  often  given  by  landlords  for  preferring  a  share 
of  the  crop  to  a  cash  rent  is  that,  in  a  country  where  most  of  the 
tenants  have  little  wealth,  a  share  of  the  product  proves  more 
profitable  to  the  landlord,  in  the  long  run,  because  he  shares 
the  benefit  of  an  extra  large  crop  and  gets  something  out  of  the 
smallest  one,  whereas  in  case  he  is  receiving  a  fixed  rent,  the 
tenant  gets  all  the  advantage  of  an  extra  large  crop,  but  in  case 
of  a  crop  failure  the  tenant  is  often  unable  to  pay  the  fixed  rent 
and  the  landlord  has  to  stand  the  losses  when  the  crops  are 
short  without  getting  the  advantage  of  the  extra  large  crops. 
Where  the  tenants  are  men  of  considerable  wealth  and  can 
stand  a  loss  from  time  to  time  this  is  a  matter  of  less  importance. 

Again,  it  is  said  that  the  collection  of  the  rent  is  an  easier 
matter  where  a  share  of  the  crop  is  given.  "  Farmers  will  give 
a  fifty  cent  chicken  for  a  church  dinner  when  they  would  not 
think  of  giving  as  much  as  twenty-five  cents  in  cash,"  says  an 
Iowa  farmer  who  has  tried  both  systems,  and  he  continues, 
"  They  will  give  the  landlord  his  share  of  the  farm  products 
much  more  cheerfully  than  pay  him  cash." 

The  share  rent  adjusts  itself  to  changes  in  the  value  of  the 
products  without  any  change  in  the  contract.  This  is  looked 
upon  by  some  farmers  and  landlords  as  a  reason  of  first  impor- 
tance for  adhering  to  the  share  system. 

Participation  of  the  landlord  in  the  management  of  the  farm 
is  the  chief  reason  for  the  success  of  share  tenancy  in  this  country. 
This  point  has  been  emphasized  over  and  over  again  in  the 
communications  received  from  men  who  are  in  a  position  to 
know.  Share  tenancy  is,  as  a  rule,  more  profitable  to  the  land- 
lord only  when  the  farm  is  under  his  immediate  supervision. 
If  the  management  must  be  left  entirely  to  the  tenant  farmer, 
the  cash  system  is  usually  preferable  to  the  landlord.  If  the 
tenant  is  a  capable  manager,  so  that  the  supervision  of  the 
landlord  adds  nothing  to  the  product,  then  it  is  better  for  the 
tenant  to  pay  a  fixed  rent,  if  he  has  the  capital  to  do  so,  and 
secure  the  extra  profits  due  to  his  superior  ability. 


288 


AGRICULTURAL  ECONOMICS 


The  methods  of  letting  land  on  shares  are  so  varied  that  a 
brief  description  of  the  forms  of  share  tenancy  is  essential  to  an 
understanding  of  the  subject.  Share  tenancies  vary  with 
respect  to : 

(a)  The  proportion  of  the  product  received  by  each  party. 
(6)  The  equipment  and  supplies  furnished  by  each  party, 
(c)  The  degree  of  control  exercised  by  each  party. 

These  characteristics  of  the  share  systems  of  operating  land 
will  be  described  for  the  various  parts  of  the  United  States 
under  a  classification  based  on  the  share  received  by  the  land- 
lord. The  other  characteristics  will  be  discussed  under  sub- 
headings. 

The  one-fourth  system.  One-fourth  the  product  as  the  land- 
lord's share  is  the  lowest  share  rent  which  has  been  found  to  exist 


Figure  i8 

in  an  important  way  in  the  United  States.  This  system  was 
found  on  the  western  edge  of  the  wheat  region  of  the  Dakotas, 
Nebraska,  and  Kansas,  and  also  in  Oregon  and  California  in 
the  first  decade  of  this  century.  In  general  it  may  be  said  that 
the  one-fourth  system  existed  in  the  North  only  on  relatively 


«/•  C.  E?  '"^nr 
FORMS  OF  LAND  TENURE  IN  THE  UNITED  STATES 


289 


unproductive  lands.  In  the  South  the  practice  of  giving  the 
landlord  one-fourth  of  the  cotton  crop  was  very  common  wher- 
ever white  tenants  engaged  in  cotton  production.  It  was  there 
most  generally  found  in  conjunction  with  a  "  third  "  system  for 
the  grain  crops.  It  is  common  in  the  South  to  speak  of  the 
"  third  and  fourth  "  system,  which  usually  means  that  the 
landlord  receives  one-fourth  of  the  cotton  and  one-third  of  the 
grain  crops. 

In  the  "  fourth  "  system  the  tenant  usually  furnishes  all  the 
equipment  and  seeds,  but  in  case  commercial  fertilizer  is  used, 
as  is  sometimes  the  practice  in  the  cotton  country,  the  landlord 
pays  one-fourth  the  cost.  In  the  northern  states  the  landlord 
often  furnishes  nothing  but  the  bare  land  for  one-fourth  of  the 
crop. 

Under  the  fourth  system  the  tenant  is  usually  left  free  to 
produce  the  crops  as  he  pleases,  the  landlord  exercising  little 
control  beyond  the  determination  of  the  crops  to  be  grown  and 
the  area  of  each. 

The  one-third  system.  The  one-third  system  is  very  common 
throughout  the  United  States  with  the  exception  of  the  regions 


FORMS  or  iHARE  TEKANCY 
LMOLosD  nccnvct  OW^Hi 


'•''■^^    -  t^'".yK^"'''  h^'  X  •/     » 


k 


Figure  19 


290 


AGRICULTURAL  ECONOMICS 


of  very  high  land  values  in  the  North  Central  states.  Under 
this  system  the  landlord  receives  one-third  the  grain  and  some- 
times he  receives  all  the  straw  and  corn  stalks  and  stands  none 
of  the  expense  of  production. 

The  landlord  receiving  a  third  of  the  produce  usually  furnishes 
no  part  of  the  operating  equipment  of  the  farm.  In  many 
instances  the  tenant  pays  a  cash  rent  for  the  house  in  which 
he  lives  and  for  pasture  for  his  Kve  stock.  In  many  other  cases 
fields  only  are  rented  for  one-third  the  crop.  The  tenant  lives 
on  the  land  which  he  may  have  bought  or  leased  and  takes  two- 
thirds  the  grain  and  leaves  the  roughage  on  the  farm  where 
grown.  Where  the  "  third  "  system  exists  with  respect  to  grain 
crops,  the  hay  crop  is  usually  shared  half  and  half. 

Wliere  land  is  let  for  one-third  the  crop,  the  landlord  usually 
controls  in  detail  the  kind  of  crops  to  be  grown  on  each  field. 
Beyond  this  he  leaves  the  tenant  to  do  much  as  he  pleases. 

The  two-fifths  system.  In  the  Corn  Belt  the  two-fifths  system 
has  been  an  intermediate  stage  in  the  rise  of  share  rents  from 


Figure  20 

one-third  to  one-half  the  crop.     This  system  differs  from  the 
"  third"  system  primarily  in  the  fact  that  the  landlord  receives 


FORMS  OF  LAND  TENURE  IN  THE  UNITED  STATES      291 

two-fifths  of  the  grain,  straw,  and  corn  fodder,  and  the  tenant 
receives  three-fifths.  The  system  is  usually  the  same  as  the 
one-third  system  so  far  as  what  the  landlord  furnishes  is  con- 
cerned and  also  with  regard  to  control. 

The  half-share  system.  The  letting  of  land  for  one-half  the 
product  is  found  in  all  parts  of  the  United  States.  The  half- 
and-half  system  varies  greatly  with  respect  to  what  the  landlord 
furnishes  in  addition  to  the  land  and  buildings. 

Grain  farming  on  the  half  system.  In  one  form  of  half-share 
tenancy   found  in   the   grain   regions  of  Minnesota,  Kansas, 


Figure  21 


Nebraska,  the  Dakotas,  and  in  the  wheat  regions  of  the  Pacific 
coast,  the  landlord  furnishes  the  seed  grain  and  gets  one-half 
the  crop.  In  these  regions  it  is  often  counted  that  one-half  the 
crop,  when  the  landlord  furnishes  the  seed  and  pays  for  one- 
half  the  time  and  threshing,  is  equivalent  to  one-third  the  crop 
where  the  landlord  does  not  furnish  the  seed. 

In  central  Illinois  and  in  west-central  Indiana  the  landlord 
who  receives  one-half  the  grain  crops  furnishes  nothing  but  the 
land  and  buildings  and  exacts  a  cash  rent  for  the  land  used 


292 


AGRICULTURAL  ECONOMICS 


for  hay  and  pasture.  The  exacting  of  a  cash  rent  for  hay  and 
pasture  land  often  accompanies  the  share  system  in  the  North 
Central  states,  where  the  landlord  receives  one-third  or  two- 
fifths,  as  well  as  where  he  receives  one-half  of  crop.  In  the 
South,  corn  land  is  sometimes  let  for  cash,  while  cotton  land  is 
let  on  shares.  In  central  Illinois,  the  landlord  sometimes 
demands  half  the  grain  and  one  dollar  per  acre  in  addition,  and 
it  is  the  regular  thing  to  require  that  the  tenant  deHver  the 
landlord's  share  of  the  grain  at  the  nearest  market  at  such  time 
as  the  landlord  may  desire  to  dispose  of  his  share  of  the  product. 
It  is  in  the  heart  of  the  Corn  Belt  of  central  Illinois  that  the  land- 
lords are  able  to  make  the  heaviest  demands  upon  their  tenants. 
In  eastern  Ohio,  in  Pennsylvania,  Maryland,  and  some  adjoin- 
ing territory  where  wheat  has  long  been  considered  central  in  the 


COUNTIES   WHERE  THERE  IS  EVIOENCE   THAT 
THE  PRnPORTION  Of  THE  PRODUCT 
RECEIVED  3t  THE  L4ND1.0SDS   HAD 
IHCRE4SED  PSIOS  TO    1903 


Figure  22 

farming  system,  the  landlord  who  receives  one-half  the  grain 
usually  lets  the  tenant  have  the  use  of  the  buildings,  the  hay  and 
pasture  land  and  all  the  straw  he  cares  to  feed  on  the  farm, 
without  any  additional  compensation.  This  custom  is  held 
to  rather  tenaciously  and  in  one  instance  the  writer  found  a 
tenant  who  was  making  about  one  hundred  dollars  a  month 


FORMS  OF  LAND  TENURE  IN  THE  UNITED  STATES      293 

from  his  dairy.  This  was  appreciably  more  than  the  entire 
value  of  the  grown  crops,  yet  the  landlord  continued  to  accept 
one-half  the  grain  and  let  the  tenant  have  all  he  made  out  of 
the  dairy. 

The  land-and-stock  share  system.  Another  form  of  the  half- 
and-half  system  is  the  land-and-stock  share  system,  in  which  the 
landlord  furnishes  a  part  of  the  live  stock  or  owns  a  half  interest 
in  all  or  a  part  of  the  live  stock.  This  system  is  most  common 
in  the  dairy  regions  of  New  York,  Ohio,  Illinois,  Wisconsin, 
Iowa,  and  Minnesota.  The  variations  are  numerous,  but  the 
system  has  many  features  which  are  in  general  use. 

The  landlord  furnishes  the  land  and  the  buildings  including 
the  house  for  the  tenant.  The  tenant  furnishes  the  horses, 
tools,  and  machinery,  and  all  the  labor  required  to  operate  the 
farm.  The  landlord  and  tenant  own,  jointly,  the  cattle,  hogs, 
and  poultry  kept  on  the  farm.  The  items  of  expenses  are 
likewise  in  three  classes.  The  landlord  furnishes  material  for 
making  repairs  and  the  tenant  performs  the  work,  unless  a 
skilled  workman  is  reqmred,  in  which  case  the  landlord  pays  for 
the  mechanic.  The  tenant  stands  all  expenses  in  keeping  his 
horses,  tools,  and  machinery  in  working  order.  Expenses  for 
twine,  thrashing,  silage  cutting,  etc.,  are  usually  shared  equally. 
The  dairy  equipment  is  often  owned  jointly.  This  refers 
especially  to  the  cream  separator  and  shipping  cans.  A  common 
variation  of  this  system  is  for  the  landlord  to  furnish  all  the 
cows.  This  is  more  or  less  common  on  the  less  valuable  dairy 
farms  of  Wisconsin  and  is  often  found  in  New  York. 

The  land-and-stock  share  method  of  letting  land  has  been 
in  use  in  the  United  States  for  more  than  a  hundred  years. 
During  this  time  a  large  number  of  questions  with  regard  to 
the  duties  and  privileges  of  landlords  and  tenants  have  arisen. 
It  may  be  beneficial,  therefore,  to  take  up  these  questions  one 
by  one,  and  indicate  the  way  in  which  they  have  been  answered. 

Ownership  0}  the  partnership  property.  Where  the  landlord 
agrees  to  furnish  half  of  the  live  stock  and  the  tenant  the  other 
half  each  party  should  own  an  undivided  half  interest  in  the 
stock.    A  partnership  herd,  for  example,  in  which  the  tenant 


294  AGRICULTURAL  ECONOMICS 

owns  1 2  certain  cows  and  the  landlord  1 2  other  certain  cows  is 
sure  to  give  rise  to  trouble.  There  should  be  a  description  of 
all  partnership  property  possessed  at  the  time  the  contract  takes 
effect,  and  an  agreement  as  to  the  number  of  cows  to  be  kept, 
the  number  of  pigs  reared,  etc. 

At  the  beginning  of  the  tenancy  the  stock  which  each  party 
wishes  to  put  into  the  partnership  should  be  carefully  appraised 
and  the  difference  in  value  settled  in  cash.  This  means  that 
the  landlord  buys  a  half  interest  in  the  tenant's  cows,  hogs, 
chickens,  etc.,  and  the  tenant  buys  a  half  interest  in  the  cows, 
hogs,  chickens,  etc.,  placed  on  the  farm  by  the  landlord. 

Where  the  landlord  furnishes  all  of  the  cows,  provision  must 
be  made  for  maintaining  the  herd  by  replacing  old  cows  with 
young  ones  produced  upon  the  farm.  The  money  received  for 
the  cow  sold  is  divided  and  the  young  cow  reared  by  the  tenant 
becomes  the  property  of  the  landlord. 

Description  of  property  furnished  by  tenant.  It  is  the  most 
common  practice  for  the  tenant  to  furnish  the  teams,  tools, 
and  machinery.  The  income  of  the  landlord  is  influenced  by 
the  character  of  these  equipments.  Hence  there  should  be  a 
written  agreement  as  to  how  many  horses  are  to  be  kept  and 
the  kinds  of  tools  and  machinery  to  be  used.  Especial  care 
should  be  taken  to  have  an  understanding  regarding  the  manure 
spreader,  the  silage  cutter,  the  cream  separator  and  any  other 
equipments  which  may  be  needed  on  the  farm  but  which  are 
not  commonly  found  in  the  tenant's  outfit. 

Description  of  labor  to  be  employed  upon  the  farm.  It  has 
always  been  the  rule  to  have  in  the  lease  a  careful  descrip- 
tion of  the  land.  In  share  tenancy  it  is  equally  important 
to  have  a  careful  description  of  the  labor  supply  to  be  fur- 
nished by  the  tenant.  Where  land  is  let  on  the  land-and-stock 
share  system  it  is  common  to  speak  of  the  arrangement  as  a 
partnership  in  which  the  labor  balances  the  land.  It  is  obvious, 
therefore,  that  some  more  or  less  definite  amount  and  quality  of 
labor  should  be  agreed  upon.  This  agreement  is  desirable  for 
the  reason  that  the  interest  of  the  landlord  leads  him  to  desire 
a  large  amount  of  labor  on  his  land,  whereas  the  interest  of  the 


FORMS  OF  LAND  TENURE   IN  THE  UNITED   STATES      295 

tenant  leads  him  to  cut  down  too  much  on  the  labor  bill.  Trouble 
can  be  avoided  by  agreeing  in  advance  upon  the  amount  of  labor 
to  be  provided  by  the  tenant. 

Horse  feed.  Where  the  tenant  furnishes  all  of  the  horses 
to  operate  the  farm,  which  is  the  most  common  practice,  the 
question  has  arisen  as  to  whether  these  horses  should  be  fed  from 
the  undivided  grain  and  hay  or  from  the  tenant's  share  of  the 
grain.  This  has  generally  been  settled  in  southern  Wisconsin 
in  favor  of  feeding  the  horses  from  the  undivided  grain  and 
hay.  In  some  districts,  where  grain  farming  is  an  important 
adjunct  to  dairy  farming,  the  landlord  furnishes  all  of  the  seed 
grain,  and  the  tenant  is  required  to  feed  his  horses  from  his 
share  of  the  grain,  but  may  feed  them  from  the  undivided  hay. 
Where  special  circumstances  give  rise  to  opportunities  for 
the  profitable  employment  of  the  tenant's  horses  in  hauling 
stone  or  some  other  materials,  landlords  have  sometimes  ob- 
jected to  such  employment,  but  this  outside  work  should  be  dis- 
couraged only  to  the  extent  that  it  may  encroach  upon  time  re- 
quired properly  to  perform  the  farm  work.  The  tenant  should 
furnish  the  grain  fed  to  the  horses  during  the  time  they  are 
employed  on  outside  work  of  this  kind.  In  general,  it  is  better 
for  the  landlord  to  let  land  for  cash  where  there  is  regular 
opportunity  for  outside  employment.  This  opportunity  will 
enable  the  tenant  to  pay  a  higher  rent  than  he  could  otherwise 
pay.     This  point  should  not  be  overlooked  by  the  landlord. 

Colts  raised  by  tenant.  Where  the  horses  have  been  fed 
from  the  undivided  grain,  the  question  has  arisen  as  to  the 
ownership  of  the  colts  in  case  any  should  be  raised.  It  is 
contended  by  the  landlord  that  if  the  colts  eat  undivided  grain 
there  should  be  some  method  of  remunerating  the  landlord.  It 
is  also  claimed  that  brood  mares  require  more  feed  per  unit 
of  work  performed  on  the  farm  than  do  other  horses,  and  for 
this  reason  the  landlord  should  have  an  interest  in  the  colts. 
On  the  other  hand,  it  is  claimed  that  considerable  risk  is  taken 
by  the  tenant  where  colts  are  raised  and  that  if  the  landlord 
does  not  share  this  risk  he  should  not  share  the  colts. 

This  problem  has  been  solved  in  various  ways.     In  many 


296  AGRICULTURAL   ECONOMICS 

cases  the  difficulty  has  been  avoided  by  raising  no  colts?.  In 
some  cases  the  amount  of  feed  consumed  by  the  colts  has  been 
accounted  for.  This  is  not  a  very  satisfactory  method.  In 
other  cases  the  expenses  involved  in  the  rearing  of  the  colts 
have  been  shared  equally  and  the  colts  have  been  the  common 
property  of  landlord  and  tenant.  Where  this  practice  is  fol- 
lowed the  landlord  should  stand  the  entire  charge  for  stallion 
service  to  balance  the  risk  taken  by  the  tenant.  In  still  other 
cases  this  problem  has  resulted  in  the  landlord  owning  a  half 
interest  in  the  horses.  Where  horse  breeding  is  to  be  any 
important  part  of  the  farm  this  is  the  best  plan. 

Poultry.  The  most  approved  method  is  to  own  the  poultry 
in  partnership,  feed  it  from  the  undivided  grain,  and  divide  the 
proceeds.  In  some  instances  the  tenant  is  allowed  what  poultry 
and  eggs  he  desires  for  home  consumption,  and  where  sales 
are  made  the  proceeds  are  divided.  In  other  agreements  the 
landlord  is  to  receive  an  amount  of  eggs  and  poultry  equal  to 
that  consumed  by  the  tenant,  and  the  remainder  sold  and  the 
proceeds  divided. 

Thrashing  and  twine  bills.  The  thrashing  bill  is  usually 
shared  equally  by  landlord  and  tenant,  but  landlords  do  not  so 
generally  share  the  twine  bill,  yet  on  a  very  large  share  of  the 
farms  the  landlord  has  found  it  necessary  to  agree  to  pay  one- 
half  of  the  twine  bill  in  order  to  secure  the  tenant  desired. 

Corn  shredder,  silage  cutter,  etc.  In  recent  years  the  intro- 
duction of  the  corn  shredder,  the  silage  cutter,  and  the  corn 
binder  has  brought  new  problems.  These  machines  are  not  in 
use  on  all  farms,  and  where  they  are  used  there  is  no  settled 
practice  as  to  who  shall  pay  the  bills.  This  is  a  point  on  which 
the  parties  use  their  bargaining  power.  It  is  here  argued,  for 
example,  that  the  shredder  saves  the  labor  of  the  tenant,  and 
that  the  tenant  should  pay  the  shredder  bill.  On  the  other 
hand,  the  landlord  has  to  admit  that  the  use  of  the  shredder 
results  in  better  care  of  the  fodder,  and  leaves  the  manure  in 
much  more  desirable  form  to  be  spread  upon  the  land. 

Terms  gradually  improved  for  tenants.  During  the  last  50 
years  the  conditions  of  this  form  of  share  tenancy  have,  on 


FORJVIS  OF  LAND  TENURE   IN  THE  UNITED  STATES      297 

the  whole,  become  more  favorable  to  the  tenant.  In  the  earlier 
days,  when  the  butter  and  cheese  were  made  on  the  farms,  the 
labor  was  performed  by  the  tenant,  or,  more  often,  by  his 
wife.  The  introduction  of  the  creamery  and  the  cheese  factory 
has  relieved  the  farmer's  wife  of  this  task,  and  the  expense  of 
manufacturing  these  products  in  the  creamery  or  the  cheese 
factory  has  been  shared  equally  by  landlord  and  tenant. 

Management  oj  the  farm.  The  landlord  usually  participates 
in  the  management  of  the  farm  where  the  land-and-stock 
share  system  is  in  use.  This  custom  arises  naturally  out  of  the 
fact  that  the  landlord  has  a  very  large  investment  and  is  de- 
pending upon  the  management  of  this  property  for  his  income. 
On  the  other  hand,  the  tenant  is  usually  a  young  man,  of  much 
less  experience  than  his  landlord  and  finds  it  profitable  if  not 
always  agreeable  to  his  own  feelings  to  be  guided  by  the  experi- 
ence of  the  older  man. 

It  is  usually  stated  in  the  agreement  that  the  farm  shall  be 
managed  by  mutual  agreement  of  the  landlord  and  the  tenant. 
It  seems  to  be  generally  conceded  by  the  tenant  farmers  that 
where  land  is  let  on  shares  the  landlord  has  a  right  to  participate 
in  the  management. 

Sharing  the  proceeds.  The  landlord  and  the  tenant  share 
equally  the  proceeds  of  all  sales  and  all  increments  and  decre- 
ments in  the  value  of  all  partnership  property.  The  division 
of  income  should  be  made  at  once  upon  its  receipt  where  large 
sales  are  made.  Small  items  should  be  settled  once  a  month. 
It  is  common,  where  milk  is  deUvered  to  a  butter  or  cheese 
factory,  to  have  separate  checks  made  out  for  the  landlord  and 
for  the  tenant  so  that  no  occasion  for  trouble  may  arise  in 
making  the  division. 

Division  of  partnership  property  at  termination  of  lease. 
The  most  favored  system  seems  to  be  that  of  requiring  the 
tenant  to  divide  the  partnership  stock  of  each  kind  into  two 
equal  groups.  Where  the  units  are  large,  as  in  the  case  of  the 
dairy  herd,  it  is  common  to  balance  small  differences  with  a 
fixed  amount  of  cash.  For  example,  if  after  every  combina- 
tion has  been  tried  one  bunch  is  thought  by  the  tenant  to  be 


298  AGRICULTURAL  ECONOMICS 

worth  $20  more  than  the  other,  it  is  agreed  that  the  person 
taking  the  more  valuable  herd  shall  pay  to  the  other  $10  or 
half  the  difference. 

The  tenant  having  made  a  division  of  each  kind  of  stock, 
either  of  two  methods  may  be  used  in  determining  which  group 
will  be  left  for  the  landlord  and  which  taken  by  the  tenant. 
One  method  is  to  draw  lots.  This  method  is  good  because  the 
tenant,  knowing  he  stands  an  equal  chance  of  getting  either 
group,  will  strive  to  make  the  groups  of  equal  value.  It  is 
even  permissible  under  this  system  to  have  the  landlord  assist 
in  making  the  divisions. 

Another  method  of  determining  which  group  the  tenant  shall 
take  is  to  let  the  landlord  have  his  choice  of  the  groups  arranged 
by  the  tenant.  This  is  a  less  satisfactory  arrangement  for  the 
reason  that  the  tenant  knows  the  record  of  the  cows  better  than 
the  landlord,  and  where  this  plan  is  followed  it  is  possible  to 
get  the  more  profitable  cows  into  one  bunch  and  the  better  ap- 
pearing cows  in  the  other  in  such  a  manner  as  to  make  the 
tenant  reasonably  sure  to  get  the  more  profitable  cows. 

Another  system  of  making  a  division  of  the  jointly  owned 
property  is  for  the  landlord  and  the  tenant  to  take  turn  about 
in  choosing  from  the  herd  or  flock.  This  plan  has  been  objected 
to  on  the  ground  that  the  party  who  is  the  better  judge  of  Hve 
stock,  or  who  may  be  the  more  famiUar  with  the  live  stock,  has 
a  decided  advantage  over  the  other  party. 

Still  another  system  is  to  have  the  live  stock  appraised  by  dis- 
interested parties  and  the  interest  of  one  party  purchased  by 
the  other.  Where  the  landlord  and  the  tenant  fail  to  agree  upon 
any  other  method,  a  public  sale  may  be  called  and  the  live 
stock  put  up  at  auction. 

Croppers.  The  form  of  half-share  tenancy  found  in  the  cotton 
and  tobacco  regions  of  the  United  States  requires  no  capital  on 
the  part  of  the  tenant.  The  landlord  furnishes  the  land, 
buildings,  teams,  tools,  and  other  equipment,  and  often  advances 
the  tenant  enough  goods,  money,  or  credit  to  hve  on  while 
"  making  "  the  crop.  The  tenant,  or  cropper  as  he  is  commonly 
called  in  the  South,  furnishes  the  labor  required  to  produce 


FORMS  OF  LAND  TENURE  IN  THE  UNITED  STATES      299 

and  harvest  the  crop.  The  cotton  cropper  receives  one-half 
the  value  of  his  crops  and  free  house  rent  and  garden  as  pay  for 
his  efforts.  In  many  of  the  cotton  regions  the  cropper  is  not 
an  independent  operator.  This  is  especially  the  case  on  the 
rich  cotton  lands  where  the  plantation  is  the  effective  means  of 
organizing  and  controlling  a  class  of  tenants  who  are  differ- 
entiated from  wage  hands  principally  by  the  fact  that  they 
receive  a  share  of  the  crop  instead  of  a  fixed  wage.  The  system 
of  control  on  a  typical  cotton  plantation  in  the  Yazoo  delta  of 
Mississippi  has  been  described  as  follows :  ^ 

"While  there  are  some  small  holdings,  a  large  proportion  of  the 
land  is  cultivated  under  a  plantation  system,  white  overseers  manage 
the  plantation  and  direct  the  cultivation  from  seedtime  until  the 
cotton  is  ready  for  market.  The  plantations  are  cut  up  into  tracts 
varying  somewhat  in  size,  but  usually  from  eighteen  to  forty  acres 
in  extent ;  on  each  tract  is  a  cabin  of  two  or  four  rooms  and  a  '  lean-to ' ; 
at  a  little  distance  is  a  cotton  house  for  storing  seed  cotton  during 
the  picking  season.  Around  or  back  of  each  cabin  is  usually  a  patch 
of  ground,  perhaps  half  an  acre,  for  a  garden,  often  inclosed  by  a 
paling  fence,  which  serves  as  firewood  in  the  winter  season.  Each 
house  is  occupied  by  one  or  two  families,  who  cultivate  the  allotted 
land  about  the  house,  either  as  renters  or  croppers. 

"The  cropper  works  like  any  wage  laborer;  and  the  daily  routine 
has  a  distinct  flavor  of  the  ante-bellum  plantation  regime.  The  bell 
is  rung  at  daylight  during  the  cultivating  season,  the  negroes  gather 
at  the  lot  where  the  mules  of  the  plantation  have  been  penned  and 
fed  during  the  night ;  each  one  receives  his  mule  from  the  caretaker, 
and  if  he  needs  a  new  implement  he  gets  it  from  the  implement  store- 
house upon  order  from  the  manager ;  he  brings  it  back  when  he  has 
finished  using  it.  Each  man  works  with  his  family  in  his  own  lot ; 
the  overseer  endeavors  to  visit  each  lot  twice  a  day  to  see  that  the 
cropper  is  working  and  to  direct  him  in  his  work,  set  his  tasks,  and 
instruct  him  in  their  performance.  At  noon,  the  bell  rings  again, 
the  mules  are  brought  in,  fed  by  a  man  in  charge,  and  taken  out 
after  the  nooning  is  over.  At  sunset,  or  a  httle  later,  the  plantation 
bell  rings  again,  the  negroes  stop  work,  and  the  mules  are  brought 
to  the  common  lot  to  be  fed  and  shut  up  for  the  night.  From  first 
to  last  every  bit  of  work  is  supervised,  the  culture  planned,  the 
1  In  unpublished  manuscript  prepared  by  A.  E.  Conce. 


3CO  AGRICULTURAL  ECONOMICS 

amount  and  area  of  crop  dictated  by  the  overseer,  the  cotton  picked, 
ginned,  and  baled  under  supervision,  the  corn  harvested  and  housed, 
the  produce  divided,  the  indebtedness  deducted,  and  the  balance 
turned  over  without  a  word  on  the  part  of  the  cropper. 

"Mules  are  kept  in  a  common  lot  simply  to  insure  good  feed  and 
care,  and  to  prevent  their  being  ridden  at  night  or  on  Sundays  and 
holidays  by  the  negro.  When  the  cropper's  lot  is  at  some  distance 
from  the  mule  lot  and  he  is  a  reasonably  careful  man,  the  mule  re- 
mains in  his  charge  from  Monday  morning  untU  Friday  night  or 
Saturday  noon,  when  it  is  brought  back  again  to  the  mule  lot.  This 
one  item  of  plantation  management  has  been  a  source  of  great  saving 
both  in  efficient  work  and  goodlwork  stock  to  the  planter  and  fruitful 
cause  of  the  change  from  share  to  fixed  rent  on  the  part  of  the  negro." 

"  The  cropper,"  often  called  "  halves  "  in  the  upland  counties, 
is  usually  found  working  on  a  verbal  contract  with  a  small  land- 
owner or  a  credit  merchant  who  has  a  large  number  of  farms  in 
his  possession.  If  a  merchant  is  his  landlord,  he  is  under  super- 
vision from  March  to  December.  "  We  oversee  all  our  share 
hands,"  said  a  Holly  Springs  merchant  who  owns  thousands  of 
acres  in  Marshall  and  Lafayette  Counties,  "  we  don't '  suggest ' 
or  '  stipulate  '  —  we  '  dictate  '  what  crops  they  shall  raise,  and 
where  they  shall  raise  them.  We  require  cotton  mostly,  but 
we  insist  that  they  raise  sufficient  corn  and  fodder  to  feed  our 
mules  during  the  winter  season,  from  January  i  to  April  i, 
when  we  keep  them  in  our  own  lots."  The  supervision  is  not 
nearly  so  close  as  on  the  large  plantation ;  a  "riding  boss "  gets 
around  to  each  farm  two  or  three  times  a  v;eek  and  notes  the 
needs  and  condition  of  the  crop.  But  the  share  hand  makes 
his  own  hours  of  labor,  has  command  of  the  mule  furnished  him, 
and  is  really  very  much  freer  to  come  and  go,  to  work  and  "lay 
off  "  than  the  cropper  of  the  bottom  lands.  When  the  landlord  is 
a  small  owner,  or  lives  at  some  distance,  the  oversight  is  still 
less.  The  land  is  less  fertile,  more  must  be  tilled  to  make  a 
fair  crop,  the  tools  furnished  are  less  modern  than  those  of  the 
large  planter,  the  mules  are  less  valuable,  and  the  resulting  culti- 
vation is  very  poor.  Many  owners  live  in  town  some  miles  distant 
from  their  lands  and  take  very  little  care  of  the  share  hand's  crop. 


FORMS  OF  LAND  TENURE  IN  THE  UNITED  STATES      301 

The  two-thirds  system.  Somewhat  similar  to  the  upland 
cropping  system  is  a  system  found  here  and  there  throughout 
the  northern  part  of  the  United  States  which  may  be  called  the 
two-thirds  system.  Under  this  system  the  landlord  furnishes 
everything  but  the  labor  and  receives  two-thirds  of  the  proceeds, 
while  the  tenant,  or  share  hand,  as  he  is  more  properly  called, 
furnishes  all  the  man  labor  and  receives  one-third  of  the  pro- 
ceeds of  the  farm.  While  this  system  is  found  widely  scattered, 
it  is  not  beHeved  to  be  very  common. 

Cash  tenancy.  In  19 10  there  were  only  about  half  as 
many  cash  tenants  as  share  tenants  in  the  United  States. 
While  cash  tenancy  is  common  in  the  Corn  Belt  it  is  most  com- 
mon in  certain  parts  of  the  Cotton  Belt.  Cash  tenancy  and  negro 
tenancy  are  found  in  the  same  regions.  In  the  Cotton  Belt  of 
Texas  and  in  the  northern  part  of  Georgia,  where  white 
tenants  prevail,  share  tenancy  is  dominant.  When  it  is  further 
noted  that  most  of  the  so-called  cash  rent  among  negroes  is 
paid  in  the  form  of  a  fixed  amount  of  cotton  without  regard 
to  its  cash  value,  it  will  become  evident  that  actual  cash  rent 
is  a  minor  form  of  tenancy  in  the  ^United  States  at  the  present 
time. 

Landlords  who  live  too  far  from  their  land  or  are  too  busy  to 
give  it  the  needed  supervision  for  making  share  tenancy  a  suc- 
cess, usually  prefer  to  let  their  farms  for  a  cash  rent.  It  is 
claimed  by  many  landlords  that  the  tenants  devote  much  greater 
care  to  their  farming  under  the  cash  system  of  letting  land. 
The  feeling  that  every  extra  bushel  of  grain  and  every  extra 
fork  of  hay  is  all  his  own  will  naturally  make  the  tenant  more 
painstaking  than  he  would  be  if  only  a  part  of  these  products 
were  to  be  added  to  his  own  profits. 

This  desire  to  obtain  as  large  a  return  as  possible  is,  at  the 
same  time,  the  greatest  source  of  trouble  in  adjusting  the  rela- 
tions between  landlords  and  tenants.  The  tenant  who  has  a 
contract  for  but  one  year  is  incHned  to  look  too  strictly  to 
securing  as  large  a  profit  as  possible  for  that  one  year,  without 
any  regard  to  the  future.  As  a  result  of  this  short-sighted 
economy,  too  large  a  proportion  of  the  land  is  often  devoted 


302  AGRICULTURAL  ECONOMICS 

to  exhausting  crops,  and  the  larger  profit  of  the  one  year  is 
obtained  at  the  expense  of  the  profits  of  future  years. 

By  proper  regulations  with  respect  to  the  proportion  of  the 
land  which  shall  be  devoted  to  certain  crops,  this  difl&culty 
can  be  more  or  less  successfully  overcome,  but  such  regulations 
are  always  annoying  to  the  tenants.  The  granting  of  a  lease 
for  several  years  is  thought  by  many  to  be  all  that  is  necessary 
to  meet  the  difficulties  arising  from  the  short-sightedness  of 
the  tenants,  but  many  landlords  object  to  making  a  contract 
for  a  period  of  any  great  length.  With  all  the  difficulties  which 
may  beset  this  system,  cash  tenancy  is  preferable  to  share 
tenancy  whenever  the  management  of  the  farm  is  to  be  left 
almost  entirely  to  the  tenant,  and  where  agriculture  is  extensive 
and  the  use  of  commercial  fertilizers  is  unknown  the  letting  of 
land  for  cash  is  a  fairly  successful  method. 

Where  intensive  culture  and  the  use  of  commercial  fertilizer 
have  become  necessary  the  tenant  problem  takes  on  a  more  acute 
form.  If  we  would  study  to  advantage  the  problems  which 
arise  under  these  conditions,  we  must  turn  our  attention  to  an 
older  country  than  our  own,  where  the  tenant  problem  has  been 
a  more  serious  one,  and  whence  we  may  learn  from  the  experience 
of  others  the  remedies  which  are  fast  becoming  necessary  to 
good  relations  between  landlords  and  tenants  in  this  country. 

The  experience  of  England  shows  that  the  compensation  for 
unexhausted  improvements  is  more  successful  than  long  leases 
as  a  means  of  solving  the  problem  of  good  farming  by  cash  tenants. 
This  system  will  be  considered  in  detail  in  a  later  chapter. 

Where  land  is  let  for  cash  rental  the  management  of  the 
farm  falls  definitely  to  the  tenant.  For  this  reason  there  is 
believed  to  be  more  occasion  for  restrictions  in  cash  leases  than 
in  share  contracts  where  the  landlord  is  joint  manager  with  the 
tenant. 

Restrictions  have  not  been  numerous  in  American  cash  leases, 
but  in  Wisconsin  for  example,  the  following  are  restrictive 
clauses  which  have  been  found : 

I.  Specified  parts  of  the  farm  shall  not  be  plowed  but  shall 
be  kept  in  permanent  pasture. 


FORMS  OF  LAND  TENURE  IN  THE  UNITED  STATES      303 

2.  A  specified  number  of  acres  shall  be  kept  in  meadow,  and 
old  meadow  shall  not  be  plowed  up  until  an  equal  area  of  new 
meadow  has  been  successfully  seeded. 

3.  No  flax  shall  be  grown. 

4.  Only  .  .  .  acres  of  tobacco  may  be  grown. 

5.  Only  .  .  .  acres  of  cabbage  may  be  grown. 

6.  No  straw  or  fodder  shall  be  sold  from  the  place. 

7.  No  hay  shall  be  sold  from  the  farm. 

8.  Instead  of  6  and  7  another  lease  requires  that  enough 
stock  be  kept  to  consume  all  the  grain  and  forage  crops  produced 
upon  the  farm. 

9.  Live  stock  shall  not  be  allowed  in  the  fields  while  the  frost 
is  going  out  of  the  ground. 

10.  Hogs  shall  be  provided  with  nose  rings  in  such  a  manner 
as  will  keep  them  from  rooting  up  the  turf  when  allowed  in 
the  pastures  or  fields. 

Such  restrictions,  it  will  at  once  be  seen,  are  intended  to  force 
the  tenant  into  a  conservative  type  of  farming.  The  danger  is 
that  such  restriction  may  so  fetter  the  tenant  as  to  make  his 
farming  unprofitable. 

It  has  been  stated  most  emphatically  by  an  EngHsh  authority 
upon  this  subject  that  "  no  landlord  who  is  determined  to  in- 
troduce unreasonable  and  unnecessary  conditions  into  his  leases 
is  entitled  to  or  can  expect  to  get  first-class  tenants.  .  .  . 
There  is  no  difl5culty  in  getting  inferior  tenants  to  agree  to  any 
stipulated  terms  of  management,  but  great  caution  is  necessary 
in  laying  restrictions  upon  really  good  farmers.  .  .  .  The 
art  of  farming  is  progressive  and  cannot  be  fettered  by  any 
set  of  rules  that  are  meant  to  be  of  universal  and  unvarying  ap- 
plication. Hence,  all  the  terms  of  farm  leases  should  in  one 
respect  be  of  a  most  general  kind.  A  good  tenant  ought  not  to 
be  tied  down  with  restrictions  which  can  only  be  of  service  to 
the  landlord  in  enabling  him  to  prevent  a  bad  farmer  from 
injuring  the  land." 

In  this  country,  where  cash  tenants  have  been  put  under  few 
restrictions,  as  in  the  eastern  counties  of  Wisconsin,  the  re- 
sults have  been  on  the  whole  unsatisfactory.     Cash-rented  farms 


304  AGRICULTURAL  ECONOMICS 

are  not,  as  a  rule,  so  well  kept  up  as  farms  which  are  let  on 
shares.  This  is  due  in  part  to  the  fact  that  the  owner  is  more 
interested  in  keeping  up  the  buildings  and  fences  on  the  farm 
where  his  income  depends  directly  upon  the  annual  value  of  the 
products,  but  where  land  is  let  for  one  year  at  a  time,  the  cash 
tenant  is  interested  in  securing  the  largest  possible  profit  for 
that  one  year,  without  regard  to  the  condition  in  which  the  land 
may  be  left.  Cash  tenants  have  too  commonly  neglected  to 
sow  clover  seed,  to  produce  and  spread  large  quantities  of  ma- 
nure upon  the  farm,  and  to  destroy  noxious  weeds. 

The  demand  is  for  a  system  of  renting  land  which  will  avoid 
the  evils  of  soil  robbery  without  the  evils  of  too  great  restriction. 


CHAPTER  XXIV 
THE  DECLINE   OF  LANDOWNING   FARMERS   IN   ENGLAND 

Two  hundred  years  ago  landownership  on  the  part  of  farmers 
was  common  in  England,  but  by  igoo  it  was  very  rare. 
According  to  the  estimates  compiled  by  Gregory  King,  there 
were  180,000  landowning  farmers  and  150,000  tenant  farmers 
in  England  in  1688.  Ownership  did  not  in  all  cases  mean  the 
same  in  England  at  that  time  that  it  does  in  the  United  States 
to-day.  A  man  was  classed  as  an  owner  if  he  paid  about  two- 
thirds  the  value  of  a  piece  of  land  for  the  right  to  the  free  use  of 
the  land  so  long  as  any  one  of  three  persons  named  in  the  lease 
lived.  This  was  said  to  be  leased  out  on  hves.  Again,  there 
were  copyhold  tenures  which  gave  a  perpetual  right  to  the  use 
of  the  land  with  the  provision,  however,  that  certain  payments 
—  which  frequently  became  nominal  in  amount  —  were  made 
to  the  manorial  lord  from  time  to  time  in  accordance  with  the 
customs  of  the  manor.  The  tenure  was  permanent,  and  where 
all  these  payments  were  brought  together  and  compared  with  a 
regular  annual  rent,  they  were  very  often  small.  It  is  fair  to  say, 
therefore,  that  toward  the  close  of  the  seventeenth  century  more 
than  half  the  farmers  of  England  belonged  to  the  landowning 
class. 

In  1900,  86  per  cent  of  all  the  land  under  crops  and  grasses 
in  England  was  occupied  by  tenant  farmers;  while  slightly 
less  than  14  per  cent  was  occupied  by  owners,  but  the  owners 
were  generally  the  great  landlords,  not  landowning  farmers. 
By  making  close  inquiry  while  passing  through  more  than  half  of 
the  counties  of  England  in  1899,  the  writer  found  a  scattering 
few  who  owTied  the  land  which  they  cultivated,  but  such  farmers 
were  extremely  rare.  The  greater  part  of  the  land  designated 
as  "  occupied  by  owners  "  was  composed  of  the  "  home  farms  " 
X  305 


3C6  AGRICULTURAL  ECONOMICS 

of  landlords,  and  of  farms  which  they  had  not  been  able  to  let 
since  the  depression.  In  this  way  the  Duke  of  Grafton  occupied 
five  farms  besides  his  home  farm,  in  1899.  The  five  farms 
aggregated  five  thousand  four  hundred  and  ninety  acres.  Each 
one  of  these  farms,  as  well  as  the  home  farm,  had  a  bailiff 
(manager)  upon  it.  There  were  more  than  seventeen  thousand 
(17,189)  farm  baihffs  in  England  according  to  the  census  of  1891. 
Tenant  farmers  who  keep  bailiffs  are  very  rare.  The  vast 
majority  of  these  bailiffs  were,  doubtless,  operating  land  which 
is  recorded  in  the  Agricultural  Returns  as  "  occupied  by  owners." 
Hence  "  occupied  by  owners  "  quite  generally  indicates  a  lower 
status  of  the  farmer  than  that  of  the  tenant  farmer,  though  in 
some  instances  it  indicates  land  cultivated  directly  by  the 
owner.  Kent  was  a  county  noted  for  her  landowning  farmers  in 
the  years  gone  by,  but  in  1898  it  was  stated  that  "  the  small 
landowners  have  in  most  instances  been  compelled  to  sell  their 
land,  and  the  yeoman  of  Kent  has  practically  disappeared." 

To-day  practically  all  the  farmers  in  England  lease  the  land 
which  they  occupy.  The  young  man  becomes  a  tenant  farmer 
with  the  expectation  of  remaining  such  all  his  life.  When 
money  has  been  saved  he  looks  for  a  larger  farm  where  he  may 
employ  his  surplus  funds,  but  very  rarely  does  he  even  think 
of  investing  in  land.  To  an  American  this  seems  strange, 
and  raises  two  important  questions :  First,  what  forces  were 
operating  in  England  to  bring  about  so  complete  a  disappearance 
of  the  landowning  farmer  ?  Second,  what  has  been  done  in  Eng- 
land to  make  tenant  farming  a  satisfactory  life  for  the  farmer? 
The  first  of  these  questions  will  be  discussed  in  this  chapter, 
and  the  second  will  be  discussed  in  the  chapter  on  methods  of 
adjusting  the  relation  of  landlord  and  tenant  in  England. 

Many  of  the  small  landowning  farmers  disappeared  as  a 
result  of  improvements  in  the  methods  of  farming  during 
the  eighteenth  century.  The  names  of  Jethro  Tull  and 
Charles  Townshend  are  associated  with  movements  most 
significant  in  the  history  of  English  agriculture.  These  great 
agriculturists  carried  on  their  important  experiments  during 
the  second  quarter  of  the  eighteenth  century.    With  the  name  of 


DECLINE  OF  LANDOWNING  FARMERS   IN   ENGLAND     307 

Tull  should  be  associated  the  word  tilth;  and  the  fact  that  his 
contemporary  was  called  "  Turnip  Townshend  "  suggests  at  once 
the  phase  of  agricultural  improvement  in  which  he  was  interested. 

Tull,  in  his  "  Horse-Hoeing  Husbandry,"  emphasizes  the 
importance  of  pulverizing  the  soil.  "  The  chief  art  of  hus- 
bandry is  to  feed  plants  to  the  best  advantage,"  says  Tull, 
and  he  beheved  that,  in  the  feeding  of  plants,  tillage  is  much 
more  important  than  the  application  of  fertilizers.  He  devotes 
one  chapter  of  the  book  to  the  "  Pasture  of  Plants."  In  this 
chapter  he  emphasizes  the  importance  of  dividing  the  soil  into 
fine  particles  in  order  that  the  plants  may  find  "  pasture  " 
for  their  roots.  The  important  field  crops  of  the  time  were 
all  sown  broadcast,  so  that  it  was  difficult,  if  not  impossible,  to 
cultivate  the  crops  while  growing,  and  the  only  chance  of  giving 
tilth  to  the  soil  other  than  in  preparing  the  seed  bed  was  during 
the  fallow  year.  To  surmount  this  difficulty,  Tull  invented  a 
drill,  for  the  sowing  of  all  kinds  of  grain  and  roots,  in  order 
that  these  crops  could  be  cultivated  between  the  rows  while 
growing.  He  also  invented  a  horse  hoe  with  which  to  cultivate 
the  drilled  crops. 

The  name  of  Townshend  is  most  closely  associated  with  the 
introduction  of  turnips  and  clover  into  England,  and  with  the 
reorganization  of  the  English  field  system.  The  introduction 
of  turnips,  which  could  be  cultivated  while  growing  much  more 
satisfactorily  than  could  the  small  grains,  enabled  the  farmers 
to  dispense  with  the  fallow  wherever  tliis  crop  would  thrive. 
As  the  production  of  a  crop  of  roots  did  not  require  a  great 
deal  more  labor  than  caring  for  a  bare  fallow,  it  was  only  neces- 
sary that  an  increased  demand  for  beef  and  muttons  should 
increase  the  value  of  fodder  crops  sufficiently,  in  order  that 
turnips  should  be  very  generally  introduced.  Upon  the  intro- 
duction of  roots  and  clover,  the  old  three-field  system  of  crop 
rotation  was  replaced  by  the  "  Norfolk  four-course  system," 
which  consisted  of  a  root  crop,  followed  by  spring  grain  with 
which  clover  and  grass  seeds  were  sown ;  and  the  third  year  the 
hay  crop  was  removed  in  time  to  plow  the  land  for  sowing  wheat 
or  rye. 


3o8  AGRICULTURAL  ECONOMICS 

To  the  names  of  Tull  and  Townshend  should  be  added  that  of 
Bakewell  —  the  third  member  of  the  trinity  of  great  men 
whose  names  have  been  most  closely  associated  with  "  the  new 
agriculture  in  England."  Bakewell  flourished  at  Dishley,  in 
Leicestershire,  from  1760  to  1795,  and  produced  the  necessary 
complement  to  good  culture  and  fodder  crops,  namely,  a  breed 
of  mutton-producing  sheep  and  a  breed  of  beef-producing  cattle. 

This  "  new  agriculture  "  is  of  interest  here  because  it  led  to 
an  increase  in  the  size  of  farms,  and  to  the  inclosure  of  the 
common  fields,  both  of  which  movements  had  a  marked  influence 
upon  the  status  of  the  landowning  farmers.  In  the  agricultural 
Hterature  of  the  early  part  of  the  eighteenth  century,  one  reads 
of  the  great  benefits  to  be  derived  from  the  inclosure  of  the 
common-fields  for  the  purpose  of  adopting  the  new  agriculture ; 
and  these  inclosures  often  involved  the  buying  out  of  small 
freeholders  who  held  rights  over  the  commons  along  with  the 
lords  of  the  manors.  Laurence,  who  wrote  in  1727,  taught  with 
emphasis  that  "  A  Steward  should  not  forget  to  make  the  best 
inquiry  into  the  disposition  of  any  of  the  freeholders  within  or 
near  any  of  his  lord's  manors  to  sell  their  lands,  that  he  may  use 
his  best  endeavors  to  purchase  them  at  as  reasonable  a  price  as 
may  be  for  his  lord's  advantage  and  convenience.  Some  instances 
there  have  been  of  stewards,  who,  after  they  have  made  haste 
to  be  rich,  have  made  these  inquiries  for  their  own  sakes,  and 
have  purchased  out  the  freeholders,  thereby  making  an  estate 
for  themselves,  even  within  their  own  lord's  manors ;  insomuch 
that  sometimes  I  have  known  it  so  ordered  that  the  lord's 
tenants  have  been  called  to  do  suit  and  service  at  his  own  [the 
steward's]  court.  But,  for  the  sake  of  honor  and  honesty,  I 
hope  these  instances  are  rare ;  and  so  I  content  myself  to  have 
given  this  hint,  still  persuading  the  vigilant  steward  to  be  zealous, 
for  his  lord's  sake,  in  purchasing  all  the  freeholders  out  as  soon 
as  possible  especially  in  manors  where  improvements  are  to  be 
made  by  inclosing  commons  and  common-fields ;  which  (as  every 
one,  who  is  acquainted  with  the  late  improvement  in  agri- 
culture, must  know)  is  not  a  little  advantageous  to  the  nation 
in  general,  as  well  as  highly  profitable  to  the  Undertaker." 


DECLINE  OF  LANDOWNING   FARMERS   IN  ENGLAND      309 

The  writer  has  not  found  evidence  showing  any  great  progress 
in  this  direction  until  later  in  the  eighteenth  century,  but  there 
is  reason  for  believing  that  Laurence's  advice  was  acted  upon 
many  times  during  the  next  sixty  years.  In  1786  Marshall 
records  in  detail  an  inclosure  where  the  proceedings  seem  to  have 
been  in  exact  accordance  with  this  advice.^ 

Contemporaneous  with  the  new  agriculture,  and  perhaps  it 
is  not  too  much  to  say  making  the  new  agriculture  necessary 
and  possible,  was  the  enormous  growth  of  English  manufactures 
and  commerce.  These  Hnes  of  development  greatly  increased 
the  demand  for  agricultural  products  so  that  by  the  end  of  the 
eighteenth  century  the  price  of  such  products  had  greatly  risen. 
The  high  prices  which  could  be  obtained  for  the  products  of  the 
farm  gave  high  values  to  land  and  made  larger  farms  and 
intensive  culture  extremely  profitable.  It  required  a  great  deal 
of  capital  to  stock  a  large  farm  and  cultivate  it  in  accordance 
with  the  new  methods.  To  own  both  land  and  capital  required 
relatively  great  wealth;  and  the  rural  economists  of  the  time 
advised  farmers  to  use  their  capital  in  stocking  large  farms 
rather  than  to  invest  nearly  all  they  had  in  buying  land,  in 
which  case  the  farms  would  be  too  small  and  too  poorly  stocked 
to  be  most  profitable.  It  came  to  be  the  argument  that,  whereas 
a  farmer  could  realize  no  more  than  3  per  cent  on  investments 

1  "In  the  parish  of  Felbrigg,  in  Norfolk,  some  seven  or  eight  years  ago,  Mr. 
Wyndham,  who  is  Lord  of  the  Manor,  was  also  the  sole  proprietor  in  this  parish, 
excepting  one  small  farm,  of  seventy  pounds  a  year,  belonging  to  a  young  man,  a 
yeoman,  just  come  of  age.  An  extensive,  heathy  waste,  and  some  common-field 
lands,  were  desirable  objects  of  inclosures;  consequently,  the  possession  of  this 
young  man's  estate  became  an  object  of  importance  to  Mr.  Wyndham.  Steps 
were  accordingly  taken  towards  obtaining  the  desired  possession;  not,  however, 
by  threats  and  subterfuges,  too  commonly  but  very  impolitically  made  use  of  upon 
such  occasions;  but  by  open  and  Uberal  proposals  to  the  young  man,  the  joint 
proprietor;  who  was  made  fully  acquainted  with  the  intention;  and  frankly  told 
that  nothing  could  be  done  without  his  estate.  He  was,  therefore,  offered,  at  once, 
a  specific  and  considerable  sum,  over  and  above  its  full  value  to  any  other  person ; 
and,  to  insure  the  object  in  view,  he  had,  at  the  same  time,  an  offer  made  him  of  a 
considerable  farm,  on  advantageous  terms.  The  young  man  being  enterprising, 
and  his  little  estate  being,  I  believe,  somewhat  encumbered,  accepted  the  offer, 
sold  his  estate,  and  agreed  for  a  farm,  consisting  partly  of  old  inclosures,  in  part  of 
common-field  land,  and  in  a  still  greater  proportion  of  the  heath  to  be  inclosed." 


3IO  AGRICULTURAL  ECONOMICS 

in  land,  he  could  make  a  profit  of  lo  per  cent  by  using  it  in 
stocking  a  farm.^ 

There  is  evidence  that  many  landowning  farmers  became 
tenant  farmers  because  they  found  it  more  profitable.  For 
example,  before  the  new  agriculture  was  introduced  there  were 
many  small  owners  in  Norfolk  who  cultivated  their  own  land. 
Instances  are  noted  of  parishes  which  had  at  one  time  been 

'  James  Anderson  is  the  author  of  a  short  article  published  in  Hunter's  "  Georgical 
Essays,''  Vol.  VI,  p.  213  (York,  1804),  which  is  entitled,  "The  Bad  Consequence 
of  a  Farmer  Lessening  his  Capital  by  the  Purchase  of  Land."  The  article  reads  as 
follows:  "Those  who  are  fond  of  poUtical  calculations  may  have  here  full  scope  for 
their  ingenuity,  by  supposing  that  two  men  of  equal  spirit,  knowledge,  and  capital, 
set  out  in  the  agricultural  line.  One  of  them  as  a  farmer,  on  a  lease ;  and  the  other 
as  a  small  proprietor,  or  yeoman.  Let  the  capital  be  taken  any  how  at  random; 
say,  £2000.  The  yeoman,  we  shall  say,  lays  out  £1500  of  that  sum  in  the  purchase 
of  a  farm,  which  at  thirty  years'  purchase  [that  is,  thirty  times  the  annual  rent  or 
annual  value]  would  be  worth  £50  a  year,  and  he  has  500  left  for  stocking  and  im- 
proving it.  The  other  leases  a  farm,  which,  at  a  fair  rent,  is  worth  £200  a  year. 
Let  us  follow  out  the  calculation,  —  first,  in  regard  to  the  profits  that  the  difl'erent 
occupiers  themselves  can  enjoy,  and  the  rate  at  which  their  families  can  afiord 
to  live;  and,  second,  with  regard  to  the  augmentation  of  agricultural  produce  that 
each  of  them  could  afford  to  the  state;  and  let  this  calculation  be  continued  for  a 
considerable  number  of  years.  Then  strike  the  balance,  and  see  what  an  amazing 
difference!" 

Again,  in  recent  times  when  the  subject  of  restoring  the  old  order  of  yeoman 
farmers  was  being  agitated,  James  Caird  (J.  R.  Agr.  S.  E.,  Series  III,  Vol.  I,  p.  27) 
gives  a  very  clear  statement  of  the  problem  suggested  by  James  Anderson  three 
quarters  of  a  century  earlier.  Caird  writes:  "There  are  two  capitals  employed  in 
British  agriculture;  that  of  the  landowners  and  that  of  the  farmer.  The  first, 
which  is  the  land  itself,  and  the  permanent  improvements  upon  it,  had  hitherto 
been  certain  and  safe,  and,  therefore,  yielding  a  small,  but  regular,  return;  the 
other,  the  hvestock  and  crops,  subject  to  risk  of  seasons,  and  speculations,  and 
liable  to  compensation  prices,  requiring  a  much  larger  percentage  to  cover  risk. 
The  capitalist  is  content  with  3  per  cent  for  his  heretofore  secure  investment,  which 
carried  with  it  also  influence  and  social  position.  A  farm  worth  £50  an  acre  for 
the  freehold  needs  a  further  capital  of  £10  an  acre  to  provide  the  farmer's  capital 
for  its  cultivation.  The  landowner  is  satisfied  with  a  return  of  3  per  cent  on  his 
£50,  while  the  tenant  looks  for  10  per  cent  for  management  and  risk  and  interest 
on  his  £10.  Let  us  suppose  that  the  farmer  has  a  capital  sufficient  to  buy  100  acres 
at  this  price,  and  stock  them;  he  would  get  for  his  £5000,  invested  in  freehold, 
£150,  and  for  his  £1000,  farm  capital,  £100;  together,  £250.  But  if  he  followed 
the  custom  of  his  country  and  used  the  whole  of  his  capital  in  cultivating  another 
man's  land,  he  would  with  his  £6000  hire  600  acres,  on  which  his  returns  ought  to 
be  £600.  He,  in  truth,  thus  trades  on  the  capital  of  the  landowner,  practically, 
let  to  him  at  the  moderate  rate  of  3  per  cent,  which  he  converts  into  a  trade  profit 
on  his  own  capital  of  10  per  cent." 


DECLINE  OF  LANDOWNING  FARMERS  IN  ENGLAND      311 

occupied  entirely  by  this  class  of  farmers.  But  by  1787  there 
had  been  a  striking  decline  in  the  number  of  those  belonging  to 
this  class.  Marshall  says  that  the  small  proprietors  saw  all 
about  them  tenant  farmers,  whom  they  had  held  as  their 
inferiors,  reaping  great  profits  and  rising  to  a  degree  of  afiluence 
superior  to  their  own.  The  tenant  farmers  were  able  to  live 
in  a  style  too  extravagant  for  the  small  proprietors,  and  this 
naturally  made  the  latter  dissatisfied  with  their  position,  "  and 
either  launched  out  into  extravagance  ill  suited  to  their  income, 
or  voluntarily  sold  their  comparatively  small  patrimonies,  in 
order  that  they  might,  agreeably  with  the  fashion  or  frenzy 
of  the  day,  become  great  farmers."  The  lands  owned  by  these 
yeoman  farmers  fell  into  the  hands  of  men  of  fortune  and  became 
united  with  their  large  estates. 

The  manufacturing  industries  did  not  merely  expand  during 
this  period,  they  changed  their  form  of  organization ;  and  this 
change  in  organization  had  an  important  influence  upon  the 
small  farmers  of  England.  As  the  factory  system  became 
established,  the  domestic  system  of  manufacturing  was  no 
longer  profitable,  and  the  small  farmers  who  had  depended 
upon  spinning  and  weaving  for  a  part  of  their  income  were 
deprived  of  this  means  of  supplementing  the  returns  of  their 
small  holdings.  Many  of  these  small  farmer-manufacturers 
were  absorbed  by  the  large  industries  of  the  towns,  others  turned 
their  entire  attention  to  agriculture  and  became  prosperous 
farmers,  while  others  were  reduced,  in  time,  to  the  ranks  of  the 
agricultural  laborers. 

But  these  are  not  the  only  ways  in  which  the  growth  of  manu- 
factures and  commerce  influenced  rural  affairs.  Many  who  had 
made  their  fortunes  in  manufactures  or  in  commerce  desired 
to  own  country  homes.  These  country  homes  often  consisted 
of  very  small  areas  with  villas  built  upon  them,  but  more  com- 
monly, owing  to  an  "  inordinate  desire  "  to  be  connected  with  the 
new  agriculture,  the  wealthy  merchants  and  manufacturers  pur- 
chased farms  and  operated  them,  not  for  profit,  but  for  pleasure. 

While  farming  for  pleasure  led  to  the  buying  out  of  many 
landowning  farmers  in  the  vicinity  of  the  large  centers  of  wealth, 


312  AGRICULTURAL   ECONOMICS 

this  was  of  less  permanent  significance  than  the  fact  that  many 
of  the  men  who  had  acquired  wealth  wished  to  acquire  social 
and  political  position ;  and  this  could  be  done  most  readily 
by  becoming  great  landlords.  This  led  many  of  the  new  men 
of  wealth  to  buy  land  and  establish  their  families  upon  large 
estates.  This  competition  of  rich  men  in  the  land  market 
resulted  in  high  land  values  relatively  to  the  rental  value  of 
land,  which  made  it  all  the  more  difficult  for  farmers  to  buy 
land.  In  these  various  ways  the  reorganization  of  agriculture 
in  England  at  the  close  of  the  eighteenth  century  tended  to 
reduce  the  number  of  farmers  who  owned  the  land  which  they 
cultivated,  and  to  increase  the  numbers  of  great  landlords  and 
of  tenant  farmers. 

Fluctuating  land  values  and  agricultural  depressions  hastened 
the  decline  of  landowning  farmers.  The  wide  discrepancy 
between  the  rate  of  return  on  investment  in  land,  and  the  rate 
of  interest  which  farmers  had  to  pay  on  borrowed  funds,  was  a 
constant  force  tending  to  reduce  landownership  on  the  part  of 
farmers.  The  work  of  the  agricultural  depression  was  that  of 
speeding  up  the  movement  at  times  by  reducing  incomes  and 
forcing  mortgaged  owners  to  sell  their  farms. 

In  the  normal  movement  of  affairs  the  farms  passed  from 
father  to  son,  but  it  was  usual  for  the  other  members  of  the 
family  to  be  provided  for.  This  usually  meant  that  the  son 
who  took  the  farm  had  to  do  so  under  heavy  encumbrance. 
It  would  appear  that  primogeniture  and  entail  were  institutions 
affecting  the  large  landlords,  but  little  practiced  among  the 
smaller  owners,  with  whom  the  idea  of  more  or  less  equal  division 
of  property  among  all  members  of  the  family  prevailed.  There 
were  always  miany  landowning  farmers  who  were  heavily  in 
debt  and  to  this  class  depression  often  resulted  in  forced  sale. 
With  wealthy  lords  always  in  the  market  for  land  these  farms 
were  absorbed  into  the  large  estates. 

The  depression  in  English  agriculture  from  1820  to  1836 
resulted  in  a  marked  decline  in  landownership  on  the  part  of 
English  farmers.  The  first  twelve  years  of  the  nineteenth 
century  were  extremely  prosperous  times  for  English  agriculture, 


DECLINE  OF  LANDOWNING   FARMERS  IN   ENGLAND      313 

and  until  1820  prices  had  not  been  reduced  very  materially; 
but  from  1820  to  1836  prices  were  comparatively  low.  This 
era  of  low  prices,  following  the  great  prosperity  of  war  times, 
wrought  disaster  among  all  classes  in  England  who  were  de- 
pendent upon  agriculture  for  an  income.  Tooke  attributes 
the  high  prices  of  one  period  and  the  low  prices  of  the  other  to 
the  war,  the  currency,  and  the  variations  of  the  seasons,  along 
with  a  rapidly  growing  population  engaged  in  manufactures 
and  commerce.  The  war  made  the  importation  of  food  danger- 
ous and  expensive  and  a  somewhat  debased  currency,  and  bad 
seasons  at  the  close  of  the  century,  with  an  increasing  demand 
for  food,  resulted  in  extraordinarily  high  prices.  On  the  other 
hand,  peace,  a  restored  currency,  and  a  series  of  excellent  crops 
after  18 19  resulted  in  a  great  reduction  in  prices. 

The  parHamentary  report  made  by  the  Select  Committee  on 
Agriculture  for  the  year  1833  shows  large  numbers  of  landowning 
farmers  in  the  various  parts  of  England  at  that  date.  Many 
of  these  men  held  estates  which  had  been  handed  down  from 
father  to  son  for  many  generations,  while  large  numbers  had 
purchased  the  land  they  occupied.  But  these  yeomen  farmers 
were  hard  pressed  and  many  had  sold  their  land  before  1833. 
When  we  go  carefully  through  the  minutes  of  evidence  given 
before  the  committee  we  are  especially  impressed  with  the  rapid 
decrease  in  the  number  of  landowning  farmers,  which  had 
taken  place  after  the  war,  and  before  1833.  In  Cumberland 
and  Westmoreland  the  number  had  "  considerably  diminished." 
Up  to  the  war  properties  had  continued  long  in  the  same  famihes, 
but  in  1833,  Mr.  Blamire  said  he  believed  that  since  181 5  a 
greater  change  had  taken  place  in  the  proprietorship  of  the 
small  farms  than  in  any  antecedent  period  of  much  longer 
duration.  In  1837,  Blamire  was  again  before  the  Committee, 
and  says :  "  The  condition  [of  the  landowning  farmers  in 
Cumberland]  is  generally  speaking  most  pitiable.  At  the 
present  moment  they  are  as  a  body,  in  fact,  ceasing  to  exist  at 
all."  Mr.  Merry,  the  owner  and  occupier  of  a  three-hundred 
acre  farm  in  the  North  Riding  of  Yorkshire  stated  that  in  the 
different  dales  in  the  district  where  he  lived  the  farmers  had 


314  AGRICULTURAL  ECONOMICS 

nearly  all  been  ''  ancient  freeholders  " ;  but  the  number  of 
such  farmers  had  been  "  regularly  lessening  for  ten  years," 
during  which  time  they  had  been  reduced  about  a  seventh. 
From  Mr.  W.  Simpson  we  learn  that  the  landowning  farmers 
were  "  nearly  all  gone  "  near  Doncaster,  Yorkshire.  In  Not- 
tinghamshire there  were  "  comparatively  very  few  remaining." 
In  Leicestershire,  Northumberland,  and  the  Midland  Counties, 
generally,  small  proprietors  farming  their  own  land  were  numer- 
ous, but  "  a  great  many  of  them  "  had  been  ruined.  In  Shrop- 
shire and  in  Cheshire  the  number  of  "  small  landed  proprietors  " 
had  "  greatly  diminished,  .  .  .  since  the  year  1800."  In  Here- 
fordshire there  were  still  a  great  many  yeomen  but  fewer  than 
twenty  years  earher.  In  Worcestershire  a  good  many  free- 
holders, who  farmed  their  own  lands,  had  sold  out.  In  Kent, 
near  Rochester,  no  great  number  had  gone  to  the  wall,  but  they 
were  poor,  many  of  them  living  little  better  than  workingmen. 
Such  farmers  were  yet  numerous  in  Hampshire  and  West 
Sussex,  but  many  had  been  compelled  to  sell  their  estates  and 
those  who  remained  were  "  much  reduced  in  point  of  circum- 
stances." In  Wiltshire  the  number  of  landowning  farmers  had 
diminished  "  most  materially  "  within  the  past  fifteen  years. 
In  Somersetshire  land  had  been  changing  hands  a  great  deal  since 
the  war,  and  the  number  of  farmers  who  bought  land  was  not  so 
great  as  the  number  of  those  who  had  sold.  It  was  the  custom 
there  for  the  landlords  to  "  run  out  "  the  life  leases  and  not 
make  any  new  ones.  Thus  all  the  evidence  points  to  the  con- 
clusion that  an  unusually  rapid  decline  of  the  yeomanry  had 
taken  place  during  the  period  of  the  agricultural  depression 
which  followed  the  close  of  the  Napoleonic  wars.  We  shall  now 
investigate  somewhat  in  detail  the  causes  of  this  unusually 
rapid  decline. 

Extravagance,  living  beyond  one's  income,  often  leads  to 
bankruptcy  in  all  lines  of  business,  and  it  would  be  strange, 
indeed,  if  this  were  not,  occasionally,  the  cause  which  compels 
farmers  to  sell  their  estates.  From  John  Norden  we  learn 
that  in  1607  this  was  sometimes  the  cause  of  failure  on  the 
part  of  landowning  farmers  in  England.     In  1833  a  great  many 


DECLINE  OF  LANDOWNING  FARMERS   IN  ENGLAND      315 

of  the  yeomen  of  Cheshire  were  living  beyond  their  means. 
During  the  period  of  high  prices  they  had  accustomed  them- 
selves to  a  standard  of  living  which  they  were  unable  to  main- 
tain after  prices  had  fallen,  without  gradually  consuming  their 
estates.  Lee  says  of  this  class,  "  Their  property  is  nearly  gone." 
There  is  a  suggestion  that  a  change  of  this  kind  in  the  habits 
of  the  yeomen  farmers  may  have  been  the  occasion  of  forced 
sales  of  land  in  Worcestershire  and  in  Somersetshire. 

But  while  extravagance  may  at  times  have  been  the  cause  of 
failure,  the  yeomen  as  a  class  were  industrious  and  frugal. 
Speaking  of  the  yeomanry  of  Cumberland,  Blamire  says,  they 
"  are  quite  as  frugal  as  the  tenantry  and  often  more  so,  and 
their  situation  is  often  worse.  .  .  .  They  equally  lodge  their 
laborers  in  their  own  houses,  and  dine  at  the  same  table 
with  them."  Having  to  give  up  their  estates  was  "by  no 
means  the  effect  of  improvidence  on  their  part."  Mr.  W.  Thur- 
nall  said  that  in  Cambridgeshire  the  yeomen  were  very  economi- 
cal and  always  hard-working  men.  "  There  is  not  a  more 
industrious  man  in  the  three  counties,"  says  J.  B.  Turner, 
"  than  a  man  in  Herefordshire  whose  estate  has  been  sold  under 
bankruptcy." 

It  was  not,  as  a  rule,  lack  of  frugality  and  industry  which  ruined 
so  many  of  the  yeomanry  during  this  period  of  depression ; 
it  was  primarily  the  fall  in  prices  at  a  time  when  indebtedness 
was  very  prevalent  with  this  class.  This  indebtedness  was 
sometimes  incurred  for  the  purpose  of  purchasing  land,  some- 
times for  improvement,  often  to  provide  for  the  younger  mem- 
bers of  the  family,  and,  occasionally,  to  cover  general  living 
expenses. 

Mr.  W.  Simpson  told  the  Committee  of  1833  that  the  yeo- 
manry near  Doncaster  were  "  many  of .  them  bankrupts." 
"  Farmers  who,  having  four  or  five  thousand  pounds,  bought 
farms  twenty-five  or  thirty  years  ago,  borrowing  part  of  the 
purchase  money,  have  been  obhged  to  sell,  and  they  have 
nothing  left."  In  Nottinghamshire  "  a  great  number  bought 
land  at  high  prices,  and  having  mortgaged  their  farms  for 
more  than  their  value  at  the  reduced  prices,  they  have  been 


3l6  AGRICULTURAL  ECONOMICS 

almost  universally  ruined."  This  class  of  farmers  met  with  the 
same  misfortune  in  Lincolnshire.  In  Cheshire,  "  A  great  many 
farmers  got  a  considerable  sum  of  money,  and  were  mad  to 
lay  it  out  in  land.  They  purchased  land  at  forty  years'  pur- 
chase, in  some  instances,  and  borrowed  probably  half  the 
money,"  and  soon  after,  the  produce  sold  for  so  much  less  than 
formerly  that  they  could  not  pay  the  interest  on  the  money  they 
had  borrowed  and  were  "  obliged  to  sell  their  properties  for 
what  they  could  get."  In  Shropshire,  again,  farmers  paid 
high  prices  for  land  and  "  borrowed  money,  as  much  as  they 
could  sell  the  property  for  afterwards,"  These  same  stories 
are  repeated  for  Norfolk,  Hampshire,  Somersetshire,  Berkshire, 
and  Buckinghamshire. 

Improvements  do  not  appear  to  have  been  very  generally  the 
occasion  of  indebtedness,  but  in  some  instances  the  witnesses 
before  the  Select  Committee  gave  this  as  an  important  cause. 

The  provision  for  younger  children,  or  the  paying  off  of  the 
other  heirs  when  one  member  of  the  family  took  the  estate, 
was  often  the  occasion  of  heavy  indebtedness.  In  Cumberland, 
the  "  statesmen  "  had  large  families  and  "  from  a  miscalculation 
of  their  real  situation  "  they  left  their  children  "  larger  fortunes 
than  they  ought  to  have  done,  and  saddled  the  oldest  son  with 
the  payment  of  a  sum  of  money  which  it  was  impossible  for 
him  to  pay."  This  is  given  as  an  important  cause  of  in- 
debtedness in  Nottinghamshire,  Somersetshire,  Berkshire,  and 
Buckinghamshire. 

Thus  it  would  seem  that  in  1833  these  small  estates  were  very 
generally  encumbered.  The  indebtedness  had  been  incurred 
during  the  period  of  high  prices ;  and  when  prices  fell  the  debt 
was  often  equal  to,  if  not  greater  than,  the  value  of  the  land. 
The  whole  net  product  would  not,  in  many  cases,  pay  the 
interest.  Where  this  did  not  force  the  yeomen  to  give  up  their 
estates  at  once,  the  land  usually  came  into  the  market  at  the 
death  of  the  owner,  as  no  member  of  the  family  cared,  as  a 
rule,  to  take  up  the  burden  of  mortgaged  ownership  which  had 
come  to  be  looked  upon  as  less  desirable  than  tenancy.  This 
fall  of  prices  at  a  time  when  mortgages  were  very  prevalent 


DECLINE  OF  LANDOWNING  FARMERS   IN  ENGLAND      317 

was  the  immediate  cause  of  the  rapid  decHne  in  landownership 
on  the  part  of  farmers  during  the  twenties,  thirties,  and  forties 
of  the  nineteenth  century. 

When  this  land  came  upon  the  market  it  was  usually  pur- 
chased by  great  landlords,  merchants,  or  manufacturers,  who 
very  rarely  cared  to  put  it  upon  the  market  again ;  and  thus 
the  results  of  this  temporary  depression  have  been  more  perma- 
nent than  we  should  expect  in  a  country  where  landownership 
on  a  large  scale  does  not  involve  so  many  social  advantages, 
and  where  systems  of  primogeniture  and  entail  do  not  bind  the 
large  estates  together  permanently. 

By  1836  the  depression  which  followed  the  war  had  prac- 
tically ceased  and  the  period  from  this  date  until  1875  was, 
on  the  whole,  an  era  of  great  prosperity  for  English  agriculture, 
though  the  low  returns  on  landed  investments,  lapsing  life 
leases,  forced  sales  for  settling  estates,  etc.,  were  gradually 
reducing  the  number  of  yeomen  farmers  decade  after  decade, 
until  by  the  close  of  the  third  quarter  of  the  century  they  were 
found  only  here  and  there ;  and  tenancy  was  the  rule.  In  1883 
John  Rae  estimated  that  probably  not  more  than  5  per  cent  of 
the  farmers  of  England  owned  the  land  which  they  cultivated, 
yet  during  this  period  of  prosperity  farmers  sometimes  pur- 
chased land.  A  slight  movement  in  this  direction  to  some 
extent  counteracted  the  result  of  the  tendency  on  the  part  of 
landowning  farmers  to  alienate  their  estates. 

By  1875  the  foreign  wheat  supply  had  become  more  easily 
accessible,  as  well  as  more  abundant ;  and  the  depression  which 
followed  ruined  hundreds  of  farmers  and  rendered  many  of  the 
landlords  comparatively  poor.  In  1895  the  Royal  Commission 
on  Agriculture  sent  assistant  commissioners  into  the  various 
parts  of  the  country  to  gather  information  concerning  the 
effects  of  the  agricultural  depression.  Many  of  these  assistant 
commissioners  did  not  report  upon  the  landowning  farmers, 
possibly  because  they  found  no  representatives  of  this  class, 
but  others  have  given  valuable  bits  of  information. 

Cumberland  still  retained  some  of  her  "  statesmen,"  land- 
owning farmers,  in  1895,  but  the  problems  of  the  second  quarter 


3i8 


AGRICULTURAL  ECONOMICS 


of  the  century  were  still  confronting  them.  In  consequence 
of  the  legacies  and  annuities  which  eldest  sons  had  to  pay  on 
the  basis  of  the  high  prices  which  prevailed  before  the  depression 
of  1875,  a  great  many  yeomen  farmers  were  "  over  head  and 
ears  in  debt."  Not  only  had  prices  fallen,  but  the  number  of 
years'  purchase  at  which  land  could  be  bought  had  been  reduced. 
These  estates  were  usually  mortgaged,  and  often  so  heavily 
that  the  farmer  who  nominally  owned  his  land  had  more  to 
pay  as  interest  than  the  tenant  farmers  paid  as  rent.  It  is 
said  that  this  class  of  farmers  had  been  gradually  decreasing 
in  numbers  for  many  years.  This  gradual  decline  is  illustrated 
in  a  most  interesting  manner  by  the  figures  available  for  the 
parish  of  Abbey  Quarter,  as  shown  in  Table  XXII. 

TABLE  XXII 


Year 


1604 
1648 
1780 
1812 

1837 
1864 
1894 


Number  of 
"  Statesmen  " 


83 
81 

SI 

38 
30 


Number  of 
Leaseholders 


None 


29 
41 


Average  Size 
^OF  Holdings 


42  acres 

54  acres 

58  acres 

58  acres 

100  acres 

100  acres 

100  acres 


"  There  have  been  three  causes  for  the  gradual  diminution  in 
numbers  of  the  statesmen,"  says  Mr.  Fox.  "  In  the  first  place, 
many  of  them,  tempted  by  the  high  prices  offered  for  their  land 
by  large  landowners,  have  sold.  .  .  .  Secondly,  a  number  of 
them,  since  the  lower  prices,  have  let  their  land  to  tenants. 
But,  thirdly,  the  quaHties  which  are  necessary  to  insure  success 
on  a  small  holding,  and  which  should  be  conspicuous  both  in 
the  owner  and  his  wife,  namely,  energy  and  thrift,  are  not 
necessarily  hereditary  qualities  .  .  .  and  there  are  cases  where 
land  has  had  to  be  sold  because  the  mode  of  life,  which  was 
pursued  by  the  father,  and  accompanied  by  success,  was  not 
acceptable  to  the  son." 


DECLINE  OF  LANDOWNING  FARMERS  IN  ENGLAND      319 

In  Westmoreland  the  landowning  farmers  had  gradually 
disappeared  until,  in  1895,  they  were  nearly  extinct.  "  How- 
ever, we  may  regret  the  change,"  to  quote  Coleman,  after 
Wilson  Fox,  "  it  appears  to  have  been  inevitable.  Land  is  an 
expensive  luxury,  and  not  a  profitable  investment.  As  civi- 
lization progressed,  and  the  cost  of  Uving  increased,  returns 
were  not  proportionately  advanced.  The  land  became  gradu- 
ally burdened  with  charges,  and  often  sufiFering  in  condition,  was 
eventually  parted  with,  going  as  a  rule  to  swell  the  larger 
estates.  Nor  as  regards  the  public  advantage,  need  such  a 
result  be  lamented,  for  it  is  quite  certain  that  a  flourishing  ten- 
antry under  a  liberal  and  wealthy  owner,  are  far  more  productive 
than  owners  whose  means  are  too  straitened  to  allow  of  the 
proper  appHcation  of  capital.  Probably  the  most  complete 
illustration  of  this  change  is  seen  in  the  Earl  of  Bective's  fine 
property  at  Underly,  which  comprises  about  25,000  acres. 
...  A  large  part  of  this  property  was  formerly  owned  by 
small  proprietors,  mostly  statesmen.  These  men  held  on  as 
long  as  possible,  and  were  eaten  up  by  debts  and  charges, 
and  the  soil  wretchedly  impoverished.  The  trustees  of  the 
late  Alderman  Thomson,  who  himself,  if  I  mistake  not,  sprang 
from  a  statesman  family,  bought  up  the  farms  by  degrees,  and 
there  is  still  money  waiting  similar  investments.  In  no  case 
did  the  investment  pay  more  than  two  and  three-fourths  per 
cent  on  the  purchase  money.  In  many  cases  the  former  owners 
continued  as  the  tenants;  and  when  the  land  was  drained 
and  limed,  and  proper  buildings  erected,  these  men,  who  were 
formerly  hard  up,  became  well-to-do  farmers.  .  .  .  The 
Underly  Estate  probably  yields  more  than  double  the  prod- 
uce of  which  the  land  was  capable  when  divided  and  ill 
managed." 

Writing  of  this  same  estate,  Lefevre  gives  some  additional 
facts  which  are  very  interesting  and  give  clearness  to  the 
picture.  "  This  great  property  .  .  .  was  gradually  accumulated 
and  purchased  under  the  express  direction  of  the  will  of  a  man 
who,  two  generations  ago,  made  a  large  fortune  in  trade,  and 
whose  only  daughter  married  a  nobleman.    The  estate  was 


320  AGRICULTURAL  ECONOMICS 

made  up  of  226  different  purchases,  nearly  all  of  them  cases 
where  the  vendors  belonged  to  the  class  of  yeomen  farmers, 
or  statesmen,  as  they  are  called  in  that  district,  who,  them- 
selves and  their  ancestors,  had  cultivated  their  own  lands  for 
many  generations.  Instead  then  of  226  distinct  owners  of 
land,  there  is  now  a  single  owner.  It  may  safely  be  assumed, 
in  respect  of  this  great  property,  that,  under  the  existing  system 
of  family  entail  permissible  by  law,  it  will  for  generations 
to  come  remain  intact  in  a  single  ownership." 

Lincolnshire  still  possessed  a  large  number  of  small  peasant 
proprietors  and  some  large  yeomen  farmers,  in  1895.  Many 
farmers  had  bought  land  during  the  prosperous  times  prior  to 
1875,  and  had  paid  double  the  price  for  which  it  would  sell 
after  the  fall  in  prices  had  brought  on  the  depression.  A  large 
proportion  of  the  purchase  money  had  frequently  been  obtained 
by  giving  a  mortgage  on  the  land,  and  in  some  cases  the  land 
had  fallen  in  value  until  it  was  worth  less  than  the  face  value  of 
the  mortgage.  Fox  says  of  these  men :  "  Many  .  .  .  have 
already  sunk,  overwhelmed  by  the  burden  of  interest  they  had 
to  pay."  Mr.  Fox  devotes  several  pages  to  the  condition  of 
the  small  landowning  farmers  of  the  southern  part  of 'Lincoln- 
shire. Most  of  these  people  worked  hard  and  Uved  poorly. 
In  reading  the  report  one  might  easily  think  Mr.  Fox  was  para- 
phrasing Young's  report  on  the  same  district,  written  one  hun- 
dred years  before,  were  it  not  for  the  further  evidence  of  ruin 
on  every  hand.  In  speaking  of  these  small  proprietors,  Fox 
says:  "The  possession  of  land  has  been  the  ruin  of  hundreds 
in  the  past  and  is  a  millstone  around  the  neck  of  hundreds  in  the 
present.  Not  the  least  regrettable  reflection  in  this  sad  story 
is  that  most  of  these  small  owners  are  the  flower  of  a  class,  the 
pick  of  the  foremen  and  the  laborers,  who  excelled  in  the 
performance  of  their  duties,  who  toiled  and  saved  and  denied 
themselves  for  years  to  raise  themselves  out  of  one  class  into 
another,  and  who,  when  they  had  bought  their  independence 
and  a  new  social  position,  found  themselves  bound  to  admit 
failure,  their  hard  savings  gone,  their  energies  wasted,  their 
hopes  crushed,  to  retrace  their  steps  back  into  the  ranks  out  of 


J.  C.  ELMORE 

DECLINE  OF  LANDOWNING  FARMERS  IN  ENGLAND      321 

which  they  had  stepped,  at  a  time  of  life  when  they  had  expended 
much  of  their  vitality  and  all  their  ambition." 

In  Cambridgeshire  the  depression  proved  very  disastrous 
to  the  farmers  generally.  The  landowning  farmers,  burdened 
with  mortgages,  were  the  first  to  succumb ;  and  those  of  this 
class  who  remained,  in  1895,  were  in  great  straits.  "  In  several 
districts,"  says  Fox,  "  evidence  was  privately  given  me  of  this, 
and  in  one  of  them  a  gentleman,  who  was  in  the  position  to 
know  the  facts,  stated  that  all  the  yeoman  farmers  there  .  .  . 
were  heavily  mortgaged." 

"  We  have  had  a  good  many  yeomen  in  the  County  of  Nor- 
folk," said  Mr.  Read  before  the  Commission  in  1897,  "  and  I 
say  that  they  are  much  the  hardest  hit  of  all.  They  have  to 
bear  both  the  losses  of  the  landlord  and  the  losses  of  the  tenant, 
and  there  have  been  the  most  disastrous  failures.  A  good  many 
of  our  farmers  were  told  twenty-five  years  ago  that  the  best 
thing  that  they  could  do  was  to  buy  their  farms,  and  they  did 
so,  but  they  had  not  enough  cash,  and  they  had  to  mortgage  their 
farms.  They  have  gone  to  the  wall  worse  by  far  than  the 
common  tenant  farmers.  There  are  a  good  many  of  our  old 
and  most  respected  yeomen  who  have  disappeared  within  the 
last  few  years.  I  feel  confident  that  they  will  almost  all  of 
them  go  unless  there  is  a  change  for  the  better." 

Speaking  of  Suffolk,  Mr.  Everett  of  the  commission  said,  "  We 
had  a  great  many  yeomen  farmers  and  in  the  intense  competition 
for  land  in  the  good  times,  a  great  many  men  took  that  course  of 
making  themselves,  as  they  thought,  independent ;  they  bought 
land  and  mortgaged  it,  and  I  should  think  three  quarters  of 
that  class  of  men  are  now  stripped  of  every  penny  they  had." 

During  the  "  good  times,"  the  farmers  of  Wiltshire  saved 
money  and  many  of  them  were  able  to  purchase  farms,  but  as 
in  other  places,  they  borrowed  money  and  their  investment 
proved  disastrous.  One  witness  cited  four  instances  within 
his  own  knowledge  of  farmers  who  bought  their  farms  about 
1875.  Of  these,  two  had  come  to  grief  and  absconded,  a  third 
had  lost  his  farm,  which  was  in  the  hands  of  the  mortgagee, 
while  the  fourth  was  still  holding  his  land. 


322  AGRICULTURAL  ECONOMICS 

In  speaking  of  the  condition  of  landowning  farmers  in  general, 
the  final  report  of  the  Royal  Commission  states  that  "  As  a 
rule  their  properties,  whether  inherited  or  purchased  by  the 
present  proprietors,  are  charged  with  mortgages,  and  the 
mortgagee  makes  no  remission  of  the  interest  due  to  him. 
In  consequence  of  the  shrinkage  in  the  value  of  land,  the  interest 
on  the  mortgage  has  become  in  many  cases  a  burden,  which  the 
owner  has  been  unable  to  bear,  and  frequently  where  the  yeoman 
farmer  has  succeeded  in  paying  the  interest  due  from  him  it 
has  been  a  heavier  rent  than  he  would  have  paid  to  a  landlord." 

Thus  it  has  come  to  pass  that  landowning  farmers  are  rare 
and  the  tenant  farmer  employing  a  considerable  number  of 
agricultural  laborers  is  typical  in  England  to-day.  Under 
conditions  as  they  exist  in  England  landownership  is  not  eco- 
nomically profitable  to  the  farmer.  Whether  tenant  farmers 
are  equally  desirable  citizens,  and  whether  the  nation  which 
leaves  the  problem  of  landownership  to  the  free  play  of  forces 
which  eliminate  the  small  landowner  and  establish  tenant 
farming  on  a  larger  scale  with  a  large  agricultural  laboring  class 
will  prove  to  be  as  strong  a  nation  as  where  the  landowning 
farmer  is  established  and  protected  is  one  of  the  great  questions 
that  should  receive  consideration  by  American  statesmen  to-day. 


CHAPTER  XXV 

RELATIONS  BETWEEN  LANDLORDS  AND  TENANTS  IN 
ENGLAND 

So  long  as  a  country  has  an  abundant  supply  of  productive 
land,  and  its  agriculture  is  characterized  by  the  extensive  use 
of  the  natural  fertility  of  the  soil,  the  adjustment  of  the  relations 
between  landlords  and  tenants  is  a  comparatively  simple  matter. 
But  when  some  of  the  elements  of  this  original  fertility  have 
begun  to  show  signs  of  exhaustion,  or  when  the  increasing 
demands  of  a  growing  population  make  it  necessary  that  each 
acre  of  land  shall  yield  a  larger  product,  so  that  it  becomes 
necessary  to  introduce  a  more  intensive  system  of  culture, 
involving  investments  which  cannot  be  realized  upon  for  several 
years,  the  tenant  problem  becomes  a  serious  one. 

The  same  progress  which  makes  intensive  farming  necessary 
tends  also  to  augment  the  numbers  of  those  who  must  hire  the 
land  which  they  cultivate.  With  the  growth  of  population,  com- 
petition for  the  use  of  land  becomes  more  and  more  keen  and 
drives  the  price  of  land  higher  and  higher.  This  makes  it  ever 
more  and  more  difl&cult  for  the  succeeding  generations  of  farmers 
to  acquire  the  ownership  of  land.  Other  things  remaining 
equal,  with  the  progress  of  society  the  tenant  problem  becomes 
more  general  as  well  as  more  difficult  to  solve. 

England  is  preeminently  the  land  of  tenant  farmers.  Less 
than  14  per  cent  of  the  farm  land  of  that  country  is  reported  as 
operated  by  its  owners,  and  in  most  cases  such  land  is  operated 
by  hired  farmers,  or  bailiffs  as  they  are  called.  About  86  per  cent 
of  the  farm  land  of  England  is  operated  by  tenants  who  pay  a 
fixed  rent  for  its  use.    Share  tenancy  is  not  practiced  in  England. 

It  was  more  than  a  century  ago  that  the  progress  of  English 
industrial  society  had  reached  the  stage  of  development  where 

323 


324  AGRICULTURAL  ECONOMICS 

intensive  agriculture  was  socially  desirable,  and  also  profitable 
to  the  farmers  where  their  relations  to  the  land  were  so  adjusted 
as  to  guarantee  to  them  just  returns  upon  their  investments. 
The  earliest  attempts  at  improving  the  agriculture  of  the 
country  at  once  brought  forward  the  tenant  problem.  In  1649 
Walter  Blith  wrote :  ^  "  If  a  tenant  be  at  ever  so  great  pains  or 
cost  for  improving  of  his  land,  he  doth  thereby  but  occasion 
a  great  rack  upon  himself,  or  else  invest  his  landlord  with  his 
cost  and  labor  gratis,  or  at  best  lies  at  his  landlord's  mercy 
for  requital,  which  occasions  a  neglect  of  good  husbandry  to 
his  own,  the  land,  the  landlord,  and  the  kingdom's  suffering." 

For  more  than  a  century  the  rural  economists  of  England 
have  been  trying  to  solve  this  problem.  Hence  it  is  in  England 
that  the  tenant  problem  can  best  be  studied  in  the  Hght  of 
history. 

Prior  to  the  introduction  of  the  new  agriculture,  which  move- 
ment became  important  during  the  latter  half  of  the  eighteenth 
century,  the  tenant  farmers  of  England  usually  held  their  lands 
"  at  will,"  without  any  written  agreements.  Under  this  tenure, 
the  common  law  and  the  customs  of  the  estates  formed  the  only 
tie  between  owners  and  tenants,  and  either  party  could  bring 
the  tenancy  to  a  close,  by  giving  six  months'  notice  to  the  other.^ 
Towards  the  close  of  the  eighteenth  century,  it  became  a  com- 
mon custom,  where  land  was  held  from  year  to  year,  to  draw 
up  legal  agreements,  by  which  the  tenants  bound  themselves 
"  to  the  fulfillment  of  certain  clauses  and  conditions."  *  But 
the  most  significant  movement  of  this  period  was  that  in  favor 
of  leases  for  a  term  of  years.  The  rural  economists  of  that  time 
were  quite  generally  of  the  opinion  that  long  leases  were  neces- 
sary wherever  the  farmers  were  expected  to  make  investments 
in  or  upon  the  land,  such  as  require  several  years  to  yield  their 
full  return.  It  was  stated  in  1799  that  the  improvements  which 
had  taken  place  in  England  prior  to  that  time  had  been  almost 

1  Thorold  Rogers,  "Work  and  Wages,"  pp.  458-450- 

*  Loudon,  "Encyclopedia  of  Agriculture,"  p.  764;  also,  W.  Marshall,  "Landed 
Estates,"  i8o6,  p.  378. 

'  H.  E.  Strickland,  "Agricultural  Survey  of  the  East  Ridins  of  Yorkshir«." 


RELATIONS   BETWEEN  LANDLORDS  AND  TENANTS      325 

entirely  due  to  the  custom  of  granting  twenty-one-year  leases, 
and  that  where  it  was  uncommon  to  grant  leases  for  long  periods 
of  years,  agriculture  remained  in  a  backward  condition.^ 

During  the  early  years  of  the  nineteenth  century  the  EngHsh 
Board  of  Agriculture  published  a  series  of  surveys  which  set 
forth  the  conditions  of  agriculture  in  every  county  of  the  king- 
dom. This  material,  supplemented  by  the  other  agricultural 
writings  of  the  time,  makes  it  possible  to  present,  in  considerable 
detail,  the  history  of  the  attempts  to  solve  the  tenant  problem 
in  England  by  the  introduction  of  long  leases. 

From  these  surveys  it  appears  that  the  greater  part  of  the 
tenant  farmers  of  England  one  hundred  years  ago  held  their 
farms  "  at  will,"  without  written  agreements,  or  "  from  year 
to  year  "  under  written  agreements.  In  either  case  they  might 
be  thrown  out  of  the  possession  of  their  farms  on  six  months' 
notice,  at  the  pleasure  of  the  landlord.  But  while  this  was  the 
dominant  form  of  land  tenure  throughout  the  greater  part  of 
England,  the  use  of  long-term  leases  had  greatly  increased  during 
the  latter  part  of  the  eighteenth  century,  and  leases  varying  in 
duration  from  three  to  twenty-one  years  were  found  in  every 
county.  Twenty-one-year  leases  were  much  used  in  the  eastern 
counties,  and  leases  running  from  seven  to  fourteen  years  were 
quite  common  in  the  western  and  southern  counties.  The 
county  of  Norfolk,  the  home  of  the  new  agriculture,  was  pre- 
eminently the  land  of  long  leases.  Arthur  Young  wrote  of 
this  county :  "  The  great  improvements  which  for  seventy 
years  past  have  rendered  Norfolk  famous  for  its  husbandry, 
were  effected  by  means  of  twenty-one-year  leases,  a  circum- 
stance which  very  fortunately  took  place  on  the  first  attempt  to 
break  up  the  heaths  and  warrens  in  the  northwestern  part 
of  the  county.  ...  In  general  it  may  be  held  for  sound 
doctrine  in  Norfolk,  that  an  estate  can  neither  be  improved,  nor 
even  held  to  its  former  state  of  improvement,  without  long 
leases."  ^    This  view  was  held,  also,  by  that  most  competent 

1  Brown,  "Agricultural  Survey  of  West  Riding  of  Yorkshire,"  p.  30;  also,  Arthur 
Young,  "Survey  of  Norfolk,"  p.  47. 
a  "Survey,"  p.  47- 


326  AGRICULTURAL  ECONOMICS 

agricultural  writer  of  the  time,  William  Marshall/  who  wrote 
as  follows  on  this  same  subject,  in  1795:  "Marling  is  the 
principal  improvement  of  a  Norfolk  farm,  but  who  would  marl 
on  a  seven  years'  lease?  Where  much  marling  is  to  be  done, 
fourteen  years  is  too  short  a  term." 

In  some  places,  it  is  true,  the  old  and  simple  system  of  holding 
land  from  year  to  year  was  thought  to  be  entirely  satisfactory. 
It  was  reported  that  great  estates  were  let  in  full  confidence 
without  leases  in  the  East  Riding  of  Yorkshire,  "  where  a  lease 
was  never  asked  for,  probably  never  wished  for,"  because  the 
tenants  were  "  equally  secure  "  when  holding  their  farms  from 
year  to  year.^  In  Staffordshire  the  conditions  were  much  the 
same.^  In  Derbyshire,  the  Duke  of  Devonshire  granted  no 
leases,  "but  owing  to  his  fair  treatment  of  tenants"  improve- 
ments were  carried  on  extensively ;  but  the  other  landlords  of 
the  county  were  not  able  to  inspire  such  confidence.*  Arthur 
Young,  who  was  the  champion  of  long  leases,  laid  down  the 
general  rule,  that  upon  rich  soils  where  no  improvements  are 
necessary,  "  the  want  of  leases  cannot  be  material ;  but  where 
liming,  marling,  draining,  fencing,  etc.,  are  demanded,  the 
want  of  a  lease  will  often  be  the  want  of  the  improvements."  ^ 

But  while  "  tenancy  at  will  "  or  "  from  year  to  year  "  was 
quite  satisfactory  where  no  improvements  were  to  be  made,  or 
where  the  landlords  were  able  to  win  the  confidence  of  their 
tenants,  the  surveyors  reported  quite  generally  that  the  security, 
of  long  leases  was  necessary  to  induce  the  farmers  to  carry  on 
the  needed  improvements.  In  remarking  upon  the  lack  of 
security  to  the  investments  of  tenants  in  England,  at  that  time, 
James  Anderson  says  "  an  unprejudiced  person,  who  should 
attentively  consider  the  whole  system  of  conduct  pursued  by 
landed  [proprietors,  and  the  ideas  that  in  general  prevail  in 
this  respect,  would  believe  that  agriculture  was  an  employment 
which  it  was  deemed  to  be  a  good  policy  to  repress  above  all 
others." « 

1  "Rural  Economy  of  Norfolk,"  Vol.  I,  p.  68.  *  "Survey,"  p.  72. 

*Ibid.,p.  SI.  *Ibid.,  p.  35. 

^Ibid.,  "Lincobshire,"  pp.  57-60,  •  "Agriculture,"  Vol.  Ill,  p.  92. 


RELATIONS   BETWEEN  LANDLORDS  AND  TENANTS      327 

John  Tuke,  who  for  many  reasons  favored  the  letting  of  land 
from  year  to  year,  says  in  his  report  on  the  North  Riding  of 
Yorkshire :  "  Experience,  nevertheless,  teaches  us,  that  under 
some  landlords,  especially  those  in  straitened  circumstances, 
...  or  where  considerable  improvements  are  to  be  made  at  the 
expense  of  the  tenants,  it  is  more  advisable  to  be  under  greater 
certainty,  though  attended  with  greater  rent."  ^  The  desir- 
ability of  increasing  the  number  of  twenty-one-year  leases  in 
the  West  Riding  of  Yorkshire  was  stated  very  forcibly  by 
Robert  Brown,  who  believed  that  without  long-term  leases 
improvements  could  not  be  made.^  In  Derbyshire  improve- 
ments were  thought  to  be  much  retarded  because  the  tenants 
lacked  the  security  of  long-term  leases.^  In  Lincolnshire,  where 
leases  for  a  term  of  years  were  very  rare,  it  was  generally  be- 
lieved that,  while  improvements  had  been  carried  forward 
fairly  well,  long-term  leases  would  result  in  much  greater  im- 
provement."* In  Leicestershire,  the  yeomen  farmers  were 
improving  their  lands,  but  the  tenant  farmers  were  slow  to 
make  improvements  owing  to  the  lack  of  long-term  leases.  It 
was  said  that  while  in  many  cases  the  present  landlords  could 
be  trusted  by  the  farmers,  the  estates  might  change  hands  at 
any  time  and  that  a  new  lord  usually  meant  a  different  ordering 
of  affairs.  The  phrase,  "  New  lords,  new  laws,"  was  current 
in  Leicestershire.^  In  1784  William  Marshall  was  of  the 
opinion  that,  in  the  midland  counties,  it  was  of  little  importance 
whether  land  was  held  under  a  lease  for  a  term  of  years,  or  from 
year  to  year,  —  such  was  the  confidence  of  the  tenantr}^  in 
the  landlords.  An  instance  is  given  of  a  young  man  who  held 
a  large  farm  from  year  to  year,  and  who  proceeded  to  improve 
the  land  in  various  ways.  Five  years  later  the  following  note 
was  added  to  the  earlier  statement :  "  Unfortunately  for  the 
tenant,  in  this  instance,  his  farm  is  now  on  sale,  and  the  very 
expensive  improvements  which  he  has  been  making,  are,  prob- 
ably, in  a  great  measure  sunk."  ® 

1  "  Survey,"  p.  55.  2  Ilnd.,  p.  30.  » Ibid.,  Vol.  Ill,  p.  638. 

*  Ibid.,  p.  57.  « Ibid.,  p.  341. 

«  "Rural  Economy  of  the  Midland  Counties,"  Vol.  II,  p.  52. 


328  AGRICULTURAL  ECONOMICS 

It  was  thought  that  farmers  would  be  more  enterprising  in 
Shropshire,  if  more  leases  were  granted.^  In  Worcestershire, 
it  was  believed,  both  by  the  landlords  and  by  the  tenants, 
that,  where  improvements  were  to  be  made,  a  lease  for  a  term  of 
years  was  necessary.  John  Friest,  the  author  of  the  "  Bucking- 
hamshire Survey,"  made  a  plea  for  long  leases,  especially  where 
improvements  were  to  be  made.  In  Cambridgeshire,  where 
most  of  the  farms  were  held  on  yearly  tenures,  the  lack  of  cer- 
tainty of  tenure  was  much  felt.  In  general  the  tendency  was 
for  the  tenant  farmers  who  held  their  farms  from  year  to  year, 
to  adhere  to  the  old  customs  and  to  attempt  no  new  improve- 
ments ;  for  the  saying  : 

He  that  havocs  may  sit, 

He  that  improves  must  flit, 

expressed  a  common  belief  among  the  tenant  farmers  of  that 
day  who  held  their  land  from  year  to  year.  The  farmers  and 
the  rural  economists  of  the  time  were  quite  generally  agreed  that 
the  adoption  of  long-term  leases  throughout  the  land  was 
essential  to  the  introduction  of  the  desired  improvements  in 
agriculture. 

The  long-term  lease  of  one  hundred  years  ago  reached  its 
highest  degree  of  perfection  in  the  county  of  Norfolk.  The 
two  main  objects  to  be  secured  by  the  covenants  of  the  lease 
were :  first,  to  guarantee  to  the  tenant  the  continued  possession 
of  the  farm  for  a  period  sufficiently  long  to  encourage  invest- 
ments in  improvements,  especially  such  improvements  as  are 
made  in  and  upon  the  soil  by  careful  tilth  and  by  the  addition 
of  artificial  fertilizers ;  and  second,  to  secure  the  landlord  against 
improper  use  of  the  property  during  the  last  few  years  of  the 
tenancy  so  that  the  farm  would  be  returned  to  the  landlord 
in  good  condition.  "  No  department  of  the  management  of 
an  estate  gives  more  uneasiness  to  both  landlord  and  tenant," 
says  Marshall,  "  than  do  removals,  or  exchanges  of  tenants ;  and 
every  covenant  which  facilitates  this  unpleasant  business  is 
valuable."  ^ 

>  "Survey,"  p.  137. 

*  "Rural  Economy  of  Norfolk,"  second  edition.  Vol.  I,  p.  69. 


RELATIONS  BETWEEN  LANDLORDS  AND  TENANTS      329 

In  the  Norfolk  leases  the  greater  number  of  the  covenants 
which  restrict  the  farmer  in  his  operations  pertain  to  the  last 
three  years  of  the  tenancy.  This  was  true  to  a  greater  or  less 
extent  in  the  other  counties  where  long-term  leases  were  in  use. 
This  method  of  laying  down  restrictions  seems  to  have  been 
based  on  the  belief  that  the  interest  of  the  tenant  would  lead 
him  to  farm  in  accordance  with  the  rules  of  good  husbandry  until 
the  last  few  years  of  the  tenancy,  at  which  time  he  could  increase 
his  own  profits  by  exhausting  the  soil  and  leaving  the  farm  in 
bad  condition  for  the  incoming  tenant. 

We  wish  to  call  especial  attention  to  a  covenant  given  by 
Marshall  as  found  in  the  Norfolk  leases,  which  forbids  the  taking 
of  more  than  two  grain  crops  without  a  whole  year's  fallow,  a 
crop  of  turnips,  or  "  a  two  years'  lay."  Writing  nine  years 
later  than  Marshall  (1804),  Arthur  Young  gives  the  following 
clause  among  "  new  covenants  "  in  use  in  the  county  of  Norfolk. 
The  tenant  "  shall  not  sow  any  of  the  lands  with  two  successive 
crops  of  corn,  grain,  pulse,  rape  or  turnips  for  seed,"  ^  without 
the  consent  of  the  landlord.  The  rule  that  two  grain  crops 
should  not  be  grown  in  succession  on  the  same  piece  of  land 
became  an  established  custom  in  most  of  the  grain-growing 
districts  of  England.  This  rule  was  in  harmony  with  the 
Norfolk  four-course  system  of  crop  rotation.  In  this  four- 
course  system,  a  fallow  crop,  that  is  a  cultivated  crop,  usually 
a  root  crop,  is  followed  by  a  crop  of  spring  grain  with  which 
clover  or  grass  seeds  are  sown.  After  harvesting  the  hay  the 
next  season,  the  field  is  plowed  and  put  into  condition  for  fall 
grain  which  is  the  fourth  crop  in  the  course.  For  more  than  a 
century  this  system  has  been  the  most  highly  approved  of  all 
systems  of  crop  rotation  in  use  in  England.  This  same  system 
was  introduced  into  Germany  by  Albrecht  Thaer. 

A  study  of  the  leases  in  use  in  the  various  counties  of  England 
at  the  close  of  the  eighteenth  century  does  not  give  so  favorable 
an  impression  as  do  the  descriptions  of  the  Norfolk  system. 
The  limitations  and  restrictions  as  to  the  crops  which  could  be 
grown,  and  as  to  the  system  of  crop  rotation,  were  often  of 

1  "Agriculture  of  Norfolk,"  p.  50. 


330  AGRICULTURAL  ECONOMICS 

such  a  character  as  to  make  them  injurious  to  the  interests  of  the 
farmers.  These  regulations  were  Ukely  to  be  of  such  a  character 
as  would  make  it  impossible  for  the  farmers  to  adjust  their 
farming  to  the  demands  of  the  times.  In  the  Vale  of  Gloucester, 
for  example,  where  nearly  all  of  the  land  was  as  yet  in  the 
common  fields,  the  tenants  were  required  "  to  fallow  the  arable 
land,  every  third  or  fourth  year ;  according  to  the  established 
course  of  husbandry  of  the  township."  And  again,  "  not  to 
sow  hemp,  flax,  or  rape  seed  on  any  part  of  the  premises.  Nor, 
otherwise,  to  cross-crop ;  but  to  sow  the  same  corn  and  grain, 
from  year  to  year,  according  to  the  best  and  most  usual  course  of 
husbandry  used  in  the  respective  townships."  ^ 

In  writing  on  the  subject  of  the  restricting  clauses,  generally 
found  in  the  leases  of  his  time,  Robert  Brown  says :  "  The 
restrictions  imposed  during  the  time  he  occupies  his  farm, 
prevent  the  farmer  from  changing  his  management,  or  of  adapt- 
ing his  crops  to  the  nature  of  the  soil  he  possesses.  Agriculture 
is  a  living  science  which  is  progressively  improving,  consequently 
what  may  be  esteemed  a  good  course  of  cropping  at  one  time, 
may,  from  experience  and  observation,  be  afterwards  found 
defective  and  erroneous.  That  particular  covenants  in  a  lease 
are  obstacles  to  improvements  cannot  be  disputed  ;  for  the  very 
nature  of  a  covenant  supposes  that  the  practice  to  be  regulated 
by  it  had  arrived  at  its  ne  plus  ultra,  and  could  not  be  mended. 
These  covenants  or  restrictions  subsist  more  or  less  in  every 
lease  we  heard  of ;  and  the  shorter  the  lease  the  more  numerous 
they  are.  .  .  .  General  rules  of  management  are  very  proper 
in  leases,  such  as,  to  keep  the  farm  in  good  order,  to  consume 
all  the  straw  raised  upon  it,  and  to  sell  no  dung.  These  restric- 
tions we  will  allow ;  and  every  good  farmer  will  follow  them 
whether  he  is  bound  to  do  so  or  not.  Nay,  we  will  go  farther  — 
if  leases  of  a  proper  duration  were  granted,  it  is  very  reasonable 
that  the  property  of  the  landlord  should  be  protected  by  restrict- 
ing clauses  for  the  three  years  previous  to  their  expiration. 
But  after  all,  it  will  be  found  that  no  clause  can  be  inserted, 
besides  the  general  ones  already  mentioned,  that  will  serve  to 
1  W.  Marshall,  "Rural  Economy  of  Gloucestershire,"  Vol.  I,  p.  25. 


RELATIONS  BETWEEN  LANDLORDS   AND  TENANTS      331 

enhance  the  value  of  the  land,  except  obliging  the  farmer  to 
leave  a  proportional  quantity  of  such  land  in  grass  at  the 
expiration  of  the  lease,  and  specifying  the  manner  in  which  that 
land  is  to  be  sown  down.  Other  clauses  serve  only  to  distress  the 
farmer,  but  will  never  promote  the  interests  of  the  land-lord."^ 

The  agricultural  writers  of  the  time  were  by  no  means  all  in 
full  agreement  with  Robert  Brown  in  his  views  on  the  subject 
of  leases.  Leases  seem  to  have  been  in  best  repute  in  the  eastern 
counties,  where  they  were  usually  for  a  term  of  twenty-one  years. 
Mr.  Bailey  is  quoted  as  saying,  in  criticism  of  Mr.  Brown's 
position  as  stated  above,  that,  "  if  the  proprietors  of  land  were 
sure  of  always  getting  tenants  that  would  act  properly  there 
would  be  no  need  of  restricting  covenants;  but  this  is  not 
always  the  case,  and  there  are  many  instances  of  estates  being 
much  injured  by  exhausting  crops  where  tenants  were  not 
properly  restricted.  That  many  covenants  are  useless  or 
hurtful  I  readily  admit ;  but  covenants  may  be  so  framed,  that  a 
tenant  shall  have  ample  liberty  to  take  such  crops  as  he  shall 
think  proper,  and  to  propose  such  modes  as  shall  benefit  himself 
without  injuring  his  landlord."  ^ 

It  was  quite  generally  agreed  that  long  leases,  properly  drawn, 
were  extremely  desirable  from  the  standpoint  of  the  farmer, 
wherever  improvements  were  to  be  made.  But  the  landlords 
were  not  so  generally  of  the  opinion  that  long-term  leases 
were  a  good  thing.  Many  landlords  claimed  that  it  made  the 
tenants  too  independent.^  But  a  more  important  objection  was 
found  in  the  fact  that  while  a  lease  of  sufl&cient  length  would 
enable  the  tenant  to  make  improvements,  it  was  hard  to  arrange 
matters  so  that  the  tenants  would  not  exhaust  the  land  at  the 
end  of  the  tenancy.  It  often  happened  that  a  tenant  would 
bring  the  land  into  good  tilth  and  to  a  high  degree  of  fertility 
during  the  early  years  of  his  tenancy,  and  then  take  as  nearly 
everything  out  of  it  as  possible  during  the  last  few  years  of 
the  lease. 

1  "Agricultural  Survey,  W.  R.  Yorkshire,"  pp.  42-44.  '  Ibid.,  p.  50. 

*  " Stafifordshire  Survey,"  p.  30;  "Leicestershire  Survey,"  pp.  51-52;  "North- 
amptonshire Survey,"  p.  45. 


332  AGRICULTURAL  ECONOMICS 

Another  objection  to  the  granting  of  leases  for  long  terms 
became  quite  general  between  1790  and  181 5.  The  landlords 
objected  that  as  a  result  of  rising  prices  during  the  period  covered 
by  the  leases,  they  sustained  great  losses.  It  was  maintained 
by  the  landlords  of  Surrey,  for  example,  that  by  letting  land  for 
a  term  of  fourteen  or  twenty-one  years  or  any  longer  period, 
the  owners  of  the  land  actually  received,  "  almost  every  year 
during  the  currency  of  the  lease,  and  certainly  in  the  latter  years 
of  it,  a  less  rent  than  he  did  at  the  commencement,  from  the 
depreciation  in  the  value  of  money."  ^  And  for  this  reason  the 
landlords  were  objecting  to  the  granting  of  leases.  Even  in  the 
county  of  Norfolk,  where  the  twenty-one-year  lease  had  proved 
so  beneficial,  the  landlords  objected  to  long  leases  because  it  so 
often  happened  that  soon  after  a  farm  was  rented  the  prices 
of  agricultural  produce  would  rise  so  much  higher  than  when 
the  lease  was  taken,  that  the  tenants  were  "  under-rented  " 
for  a  series  of  years. ^  The  basis  for  complaint  on  this  ground  is 
shown  by  the  fact  that  the  average  price  of  wheat  was  about 
twice  as  high  for  the  five  years  from  1809  to  18 13  as  for  the 
five  years  from  1790  to  1794.^ 

A  statement  of  the  tenant  problem  and  the  solution  proposed 
by  an  eminent  rural  economist  of  the  time  will  be  interesting  in 
this  connection.  In  his  work  on  "  Landed  Estates,"  pubhshed 
in  1806,  William  Marshall  reviews  the  existing  forms  of  land 
tenure,'*  "  the  tenant  holding  ai  will  ";  "  holding  from  year 
to  year,  under  a  written  agreement,  with  specified  covenants  " ; 
"  leases  for  a  term  of  years,  as  seven,  fourteen,  twenty-one,  or 
greater  number  of  years  "  ;  and  says : 

"  Objections  are  urged  against  each  of  these  species  of  tenancy.  The 
depreciation  of  the  circulating  value  of  money,  and  the  consequent 
nominal  rise,  in  the  rental  value  of  lands,  has  rendered  long  leases 
greatly  disadvantageous  to  proprietors:  while  annual  holdings  are 
not  only  discouraging  to  tenants ;  —  especially  to  men  of  exertion 
and  capital  —  but  are  a  bar  to  the  improvement,  and  a  clog  on  the 

1  W.  Stevenson,  "Agriculture  of  Surrey,"  p.  q8. 

2  Marshall,  "Rural  Economy  of  Norfolk,"  Vol.  I,  p.  67. 

»  Prothero,  "English  Agriculture,"  Appendix  I.  *  Pp.  378  to  382. 


RELATIONS  BETWEEN  LANDLORDS  AND  TENANTS      333 

prosperity  of  an  estate :  beside  being,  in  the  first  instance,  unfriendly 
to  the  interests  of  proprietors ;  inasmuch  as  they  lower  the  fair  rental 
values  of  their  lands. 

"  Some  years  ago,  on  perceiving  the  antipathy  which  had  gone  forth 
among  men  of  fortune,  against  granting  leases  for  long  terms,  and 
being  well  aware  of  the  disadvantages  of  annual  holdings,  it  occurred 
to  me  that  agreements  for  occupying  from  three  years  to  three  years, 
instead  of  from  year  to  year,  would  be  an  eligible  species  of  tenancy : 
or,  which  is  the  same  thing,  granting  leases  for  six  years  certain; 
with  a  condition  that  if  neither  party  give  notice  to  quit,  before  the 
expiration  of  the  first  three  years,  then  the  term  to  be  prolonged  to 
nine  years;  and  so  on,  from  three  years  to  three  years  .  .  .  until 
three  years  after  notice  has  been  duly  given,  by  either  party  to  the 
other. 

"  This  gives  room  for  a  tenant  'to  turn  his  hand  in,'  and  a  loose  to 
his  exertions.  He  has,  in  reality,  a  fresh  lease  of  six  years  granted 
him,  every  third  year.  This  is  sufficient  to  encourage  him  to  keep 
his  lands,  continually,  in  a  husbandlike  state.  And  if  he  execute,  at 
his  own  expense,  any  of  the  higher  improvements,  such  as  [improving 
waste  lands,  etc.]  it  is  but  reasonable  that  he  should  have,  whenever 
be  may  quit  his  farm,  an  equitable  remuneration  for  the  remainder 
of  such  improvements.  Thus,  the  tenant  is  placed  on  sure  ground. 
He  may  till,  manure,  and  improve,  with  much  the  same  confidence, 
as  if  the  lands  in  his  occupation  were  his  own  property. 

"  In  return  for  such  advantages,  the  tenant  cannot  refuse  to  cove- 
nant, that,  during  the  last  three  years  of  his  term,  he  will  manage  his 
farm  in  a  husbandlike  manner,  and,  at  the  end  of  the  term,  wiU  leave 
it  in  such  a  state  of  cultivation  and  repair,  as  will  induce  a  good  tenant 
to  take  it,  at  a  full  rent ;  or  suffer  the  proprietor  to  put  it  in  such  a 
state,  at  his  (the  outgoing  tenant's)  expense. 

"  An  estate  which  is  under  lease,  on  these  principles,  and  under 
attentive  management,  cannot  be  let  down  to  an  unprofitable  state. 
It  must  continually  remain  under  a  regular  course  of  husbandry, 
and  in  a  state  of  cxiltivation  and  repair.  If  the  acting  manager  do 
his  duty,  even  the  changing  of  tenants  cannot  interrupt  its  prosperity. 
The  incoming  tenant  (under  attentive  management)  steps  into  his 
farm,  with  the  advantages  that  he  would  have  enjoyed,  had  it  been 
under  his  own  direction  for  the  three  preceding  years. 

"  But,  with  a  lease  on  this  principle,  and  with  a  proper  choice  of 
tenants,  removals  can  rarely  happen.    What  superintendent,  who 


334  AGRICULTURAL  ECONOMICS 

knows  the  diflSculty  of  procuring  a  good  tenant,  would  wish  to  dis- 
charge him?  And  no  such  tenant  will  readily  leave  the  farm  he  is 
settled  upon,  if  he  find  proper  treatment.  Even  should  notice  be 
given,  in  consequence  of  any  misunderstanding  between  the  parties, 
three  years  allow  time  for  reflection;  and,  before  they  expire,  re- 
sentment may  die  away,  and  cordiality  be  restored.  If,  however, 
either  party  remain  dissatisfied,  he  has  an  easy  way  of  dissolving  the 
connection.  Or  if  a  proprietor  or  a  superintendent  is  desirous  to 
make  fresh  arrangements  on  an  estate ;  or  to  regulate  its  rent  roll, 
by  the  existing  value  of  money;  he  need  not  wait  many  years  to 
fulfill  his  desire.  For  if  the  tenant  in  occupancy  will  not  agree  to 
pay  a  fair  rent,  he  has  three  years  before  him  to  choose  one  who  will ; 
another  valuable  advantage  of  the  tenancy  proposed. 

"  Thus,  a  lease  on  this  principle  has  a  decided  preference  by  a  pro- 
prietor, to  long  leases.  And  its  advantage  over  annual  holdings  is 
not  less  considerable.  The  lands  of  an  estate  are  weU  worth  from  5 
to  10  per  cent  more,  to  a  tenant,  under  the  former,  than  under  the 
latter,  tenancy.  So  that,  besides  the  conveniences  mentioned,  a 
proprietor  may  be  immediately  adding  very  considerably  to  his  in- 
come, by  this  principle  of  management. 

"  This  species  of  tenancy  I  have  had  the  happiness  of  being  the 
means  of  introducing,  upon  some  considerable  estates,  in  England, 
in  Wales,  and  in  Scotland ;  with,  I  believe,  the  mutual  satisfaction 
of  the  men  of  fortune  who  possess  them,  and  of  their  tenants." 

While  this  system  proposed  by  Marshall  might  solve  the 
problem  of  adjusting  the  amount  of  rent  to  changes  in  real 
rental  values,  and  vi^hile  it  might  encourage  the  tenant  to  make 
such  improvements  as  he  could  realize  upon  in  three  years,  it 
lays  down  no  scheme  for  determining  the  value  of  unexhausted 
improvements,  and,  indeed,  does  not  even  propose  that  a  tenant 
shall  have  remuneration  for  the  investments  made  upon  the  land 
during  the  last  three  years,  and  on  which,  if  he  farms  in  a  hus- 
bandmanlike manner,  he  cannot  realize  all  of  the  benefit. 
Thus  it  seems  that  Marshall  failed  to  solve  the  most  permanent 
difficulty  which  the  tenant  problem  presented  ;  for  the  unsettled 
condition  of  the  money  market  became  less  important  in  the 
course  of  time,  while  the  problem  of  unexhausted  improvements 
has  been  of  increasing  importance  as  the  years  have  gone  by. 


RELATIONS  BETWEEN  LANDLORDS  AND  TENANTS      335 

Various  methods  were  devised,  in  different  parts  of  England, 
for  keeping  the  tenants  from  leaving  the  land  in  an  exhausted 
condition  at  the  termination  of  their  leases.  It  was  the  custom 
on  one  estate  in  Shropshire  to  lease  the  land  for  twenty-one 
years  "  certain,"  and  for  seven  years  more  at  the  option  of  the 
landlord.  At  the  end  of  the  twenty-one-year  period,  a  new 
contract  of  the  same  kind  might  be  entered  into,  if  terms  could 
be  agreed  upon,  or  the  tenancy  might  be  brought  to  a  close, 
but  the  important  condition  was  that  if  the  tenant  had  reduced 
the  land  to  a  very  low  degree  of  fertility  he  could  be  forced  to 
keep  the  farm  for  seven  years  longer  at  the  old  rent.  Even  if 
this  system  had  succeeded  in  protecting  the  landlord,  it  failed 
even  to  recognize  the  right  of  the  tenant  to  unexhausted  improve- 
ments. 

The  system  which  subsequent  history  has  shown  to  be  the  most 
effective  means  of  keeping  the  farmers  from  exhausting  the  land 
during  the  last  few  years  of  the  tenancy,  is  that  reported  in  the 
"  Yorkshire  Survey."  The  system  was  that  of  granting  remun- 
eration to  the  retiring  tenant  for  all  his  investments  on  which 
time  had  not  yet  allowed  him  to  reaHze  their  full  returns ;  the 
tenant  was  then  left  free  to  farm  as  he  pleased  so  long  as  he  con- 
formed to  the  rules  of  good  husbandry.  One  of  the  examples 
of  this  system  is  as  follows : 

"  The  landlord  covenants  to  allow  the  tenant,  on  quitting  his  farm, 
what  two  indifferent  persons  shall  deem  reasonable,  for  what  is 
generally  called  full  tillage  and  half  tillage,  being  for  the  rent  and 
assessment  of  his  fallow  ground,  the  plowing  and  the  management 
of  the  same ;  the  lime,  manure,  or  other  tUlage  laid  thereon ;  the 
seed  sown  thereupon ;  the  sowing  and  harrowing  thereof ;  also  for 
the  sowing,  harrowing,  manuring,  and  managing  any  turnip  fallow 
which  he  may  leave  unsown ;  also  for  any  clover  seed  sown  on  the 
premises ;  and  harrowing  and  rolling  in  of  such  seed ;  and  for  every 
other  matter  and  thing  done  and  performed  in  a  husbandrylike 
manner  on  such  fallow  lands,  in  the  two  last  years  of  the  term ;  also 
for  the  last  year's  manure  left  upon  the  premises ;  and  for  any  manure 
and  tUlage  laid  upon  the  grass  land."  ^ 

'  "W.  R.  Yorkshire,"  p.  40. 


336  AGRICULTURAL  ECONOMICS 

During  the  period  of  rising  prices  prior  to  1812,  the  farmers 
were  anxious  to  rent  land  on  long  leases.  It  is  said  that  at  that 
time,  "  good  tenants  always  wanted  leases,"  that  "  they  were 
galloping  after  one  another  to  take  leases  at  any  rent."  ^  After 
the  close  of  the  Napoleonic  wars,  prices  fell  back  almost  to  their 
old  level.  The  average  price  of  wheat  was  just  about  half  as 
high  for  the  five  years  from  1821  to  1825,  as  for  the  five  years 
from  1809  to  1 813.  With  this  fall  in  prices  the  farmers  became 
even  more  averse  to  the  taking  of  long  leases  than  the  landlords 
had  previously  been.  One  after  another  the  witnesses  before 
the  Parliamentary  Committee  on  Agriculture,  in  1833,  bore 
testimony  to  the  fact  that  the  farmers  were  objecting  seriously 
to  taking  long  leases,  because  they  did  not  know  how  soon 
they  might  be  unable  to  pay  the  rent,  as  their  capacity  to  pay 
the  rent  depended  upon  such  uncertain  prices.  The  farmers 
were  in  doubt  as  to  how  much  protection  they  were  to  have  from 
the  competition  of  foreign  producers.  But  without  regard  to 
this,  they  knew  that  the  prices  of  agricultural  products  had  been 
falling  for  several  years  in  succession,  and  they  were  unable  to 
tell  when  the  limit  would  be  reached. 

With  depressed  prices  the  landlords  found  new  reasons  for 
objecting  to  long  leases.  This  was  the  time,  one  might  think, 
for  the  landlords  to  regain  what  they  had  lost  during  the  period 
of  rising  prices,  but  they  found  it  rarely  happened  that  the 
tenants  were  able  to  stand  the  losses  incurred  by  falling  prices. 
The  farmer  could  not  be  forced  to  live  up  to  his  contract,  if  he 
was  losing  money.  It  was  said  that  leases  were  binding  upon 
the  landlords  but  not  upon  the  tenants.  The  fall  in  prices 
seemed  to  demoralize  the  farmers,  so  that  the  landlord  was 
never  certain  that  his  tenant  would  not  disregard  the  contract 
in  case  of  a  fall  in  prices,  whereas  the  tenant  would  certainly 
remain  to  reap  the  benefits  in  case  of  a  rise  in  prices. 

The  remedy  which  was  often  prescribed  for  the  evils  of 
fluctuating  prices  was  the  introduction  of  "  corn  rents."  ^  By 
this  it  is  not  meant  that  the  farmer  was  to  give  a  certain 

*  Parliamentary  Papers,  1833,  Vol.  V,  questions  7420  and  8462. 
^  Ibid.,  1833,  Vol.  V,  questions  2594-2596;   2601-2609. 


RELATIONS  BETWEEN  LANDLORDS  AND  TENANTS       337 

share  of  his  crop  to  the  landlord  as  rent,  but  that  he  should  pay 
as  rent  the  value  of  a  certain  fixed  amount  of  grain.  The  rent 
was  figured  on  the  basis  of  what  was  called  in  Scotland  the  "  fiars 
prices  of  the  county."  In  Scotland  the  sheriff  of  each  county  was 
bound  to  summon  a  jury  once  each  year  to  examine  on  oath 
a  number  of  witnesses,  such  as  farmers,  grain  dealers,  brewers, 
etc.,  and  according  to  the  evidence  thus  obtained,  to  fix  the 
"  fiars  prices  "  of  the  different  grades  of  grain.  This  system 
was  quite  generally  resorted  to  in  Scotland  during  the  period  of 
falling  prices.  Corn  rents  were  advocated  by  the  English  rural 
economists  of  the  time,  and  were  introduced  with  success  in  a 
few  instances  in  the  western  counties ;  but  this  system  failed  to 
gain  general  favor  among  the  farm.ers  and  landlords  of  England.^ 

The  use  of  long  leases  declined  rapidly  in  England  during 
the  period  following  the  close  of  the  continental  wars.  In  those 
counties  where  they  had  been  most  numerous  and  most  bene- 
ficial, the  farmers  came  to  prefer  short  leases  or  even  tenancy 
from  year  to  year.  The  long  lease  as  a  means  of  solving  the 
tenant  problem  had  been  "  weighed  in  the  balance  and  found 
wanting."  Yet  it  must  be  admitted  that  long  leases  had  done 
a  great  deal  of  good  in  promoting  improvements  in  English 
agriculture  and  now  that  the  prices  of  agricultural  products 
were  depressed  the  farmers  did  not  find  it  profitable  to  farm  their 
lands  so  intensively  as  formerly  even  if  they  had  long-term 
leases.  Thus,  the  tenant  problem  was  of  less  importance  in 
the  minds  of  the  farmers  for  a  series  of  years,  until  the  return 
of  prosperity  again  raised  the  question  of  investments  in  im- 
provements and  the  means  of  securing  just  returns  upon  such 
investments. 

The  period  from  1836  to  1875  was  one  of  general  prosperity 
for  Enghsh  farmers,  and  by  1850  the  tenant  problem  was  receiv- 
ing the  attention  of  Parliament.  The  use  of  long  leases  had 
gradually  declined  during  the  first  half  of  the  nineteenth  century, 
and  while  there  were  agricultural  economists  who  still  advocated 
this  means  of  securing  to  the  farmers  legitimate  returns  upon 

^Parliamentary  Papers,  Vol.  V,  questions  328  to  331;    347;    10438;    10448; 
10454;   10591-10595. 
z 


338  AGRICULTURAL  ECONOMICS 

their  investments,  there  was  a  very  prevalent  dislike  to  long 
leases  on  the  part  of  both  parties  concerned.  Yet  it  was  gen- 
erally recognized  that  security  to  the  tenant's  investments  was 
essential  to  the  promotion  of  that  degree  of  intensity  of  culture 
which  was  most  profitable  in  the  long  run  both  to  the  tenant 
and  to  the  landlord.^ 

The  long-period  lease  had  proved  so  unsatisfactory  that  espe- 
cial attention  was  now  given  to  the  perfecting  of  the  "  year 
to  year  "  agreement.  The  custom  of  "  tenant-right,"  which  had 
proved  satisfactory  in  Lincolnshire,  formed  the  basis  for  the 
hope  that  tenants  holding  their  farms  from  year  to  year  might 
be  given  that  degree  of  security  which  would  promote  good 
agriculture. 

The  introduction  of  agricultural  improvements  came  rather 
later  in  Lincolnshire  than  in  many  other  parts  of  England,  but 
when  the  transition  did  come  it  was  "  rapid  and  striking,  perhaps 
more  so  than  in  any  other  county  in  England."  -  These  im- 
provements were  made,  too,  without  the  protection  of  long- 
time leases.  They  were  made  under  the  protection  of  the 
Lincolnshire  system  of  tenant-right.  "  It  was  very  fortunate," 
says  Caird,  "  that  when  the  time  [for  the  introduction  of  agri- 
cultural improvements]  arrived,  the  leading  landlords  [of  Lin- 
colnshire] were  liberal  and  intelligent  men.  .  .  .  They  saw 
the  advantage  of  encouraging  tenants  to  embark  their  capital 
freely ;  and  as  leases  were  not  the  fashion  of  the  county,  they 
gave  them  that  security  for  their  invested  capital,  which  is 
termed  '  tenant-right,'  or  compensation  for  unexhausted  im- 
provements. Though  this  tenant-right  may  not  be  a  strictly 
legal  claim,  it  is  universally  admitted  in  Lincolnshire,  the  land- 
lord paying  it  when  a  farm  falls  into  his  own  hands,  and  refusing 
to  accept  a  tenant  who  declines  to  comply  with  the  custom.  It 
varies,  however,  considerably  in  the  different  parts  of  the  county, 

1  To  avoid  the  necessity  of  making  specific  references  in  great  numbers  it  will 
simply  be  stated  that  the  discussion  of  this  period  is  based  upon  a  Parliamentary 
Report  on  Agricultural  Customs,  Par^jawew^ary  Pa/^eri,  1 847-1 848,  Vol.  VII;  and 
Caird's  "EngUsh  Agriculture"  in  1850  and  1851.  In  these  sources  the  material 
here  used  is  indexed  under  "tenant-right." 

^  Caird,  "English  Agriculture,"  p.  194. 


RELATIONS  BETWEEN  LANDLORDS  AND  TENANTS     339 

and  appears  to  have  enlarged  in  its  obligations  \A'ith  the  greater 
development  of  agricultural  improvements.  In  North  Lincoln- 
shire, the  usual  allowances  claimed  by  the  outgoing  from  the 
incoming  tenant,  include  draining,  marUng,  chalking,  claying, 
lime,  bone,  guano,  rape  dust,  and  oil-cake.  The  following  is  the 
scale  on  which  these  allowances  are  usually  made : 

"  '  When  the  landlord  has  found  tiles,  and  the  tenant  has  done  the 
labor,  if  done  within  twelve  months  before  the  end  of  the  tenancy 
and  no  crop  has  been  taken  from  land  after  the  draining  thereof  is 
completed,  the  whole  cost  is  allowed.  If  one  crop  has  been  taken 
from  such  land,  three  fourths  of  the  cost  are  allowed,  and  so  on, 
diminishing  the  allowance  by  one  fourth  for  each  crop  taken;  but 
this  allowance  is  made  only  when  the  work  is  well  and  properly  done 
by  the  tenant,  to  the  satisfaction  of  the  landlord  or  his  agent,  ex- 
pressed in  writing.  For  marling  or  chalking,  if  done  within  twelve 
months  before  the  end  of  the  tenancy,  the  whole  cost  is  allowed ;  for 
that  done  in  the  previous  year,  seven  eighths  of  the  cost  are  allowed ; 
and  so  on,  diminishing  the  allowance  by  one  eighth  for  each  year 
that  shall  have  elapsed  since  the  marUng  or  chalking.  —  For  Ume  used 
within  twelve  months  before  the  end  of  the  tenancy,  if  no  crop  has 
been  taken  from  the  land  limed  in  that  year,  the  whole  cost,  including 
labor,  is  allowed;  if  one  crop  has  been  taken  from  such  land,  four 
fifths  of  the  cost  are  allowed ;  and  so  on,  diminishing  the  allowance 
by  one  fifth  for  each  crop  taken  from  such  land.  —  For  claying  on 
light  land,  a  similar  allowance  to  that  for  lime.  —  For  bones  used 
within  twelve  months  before  the  end  of  the  tenancy  two  thirds  of 
the  cost  are  allowed,  and  for  those  used  in  the  previous  year  one 
third  of  the  cost.  —  For  guano  and  rape  dust  used  within  twelve 
months  before  the  end  of  the  tenancy  for  turnips  or  other  green  crop, 
two  thirds  of  the  cost  are  allowed.  —  For  oil-cake  given  to  cattle  and 
sheep  one  third  of  the  cost  price  of  that  so  used  within  twelve  months 
before  the  end  of  the  tenancy,  and  one  sixth  of  the  cost  price  of  that 
so  used  in  the  previous  year  is  allowed.' 

"The  amount  of  these  allowances  is  settled  by  arbitration.  .  .  . 
On  the  whole,  .  .  .  the  system  is  beheved  to  have  worked  well."^ 

The  custom  of  tenant-right  was  fully  recognized  in  the 
counties  of  Sussex,  Surrey,  and  Lincoln,  in  the  Weald  of  Kent, 

*  Caird's  "English  Agriculture  in  1850  and  1851,"  pp.  194-105. 


340 


AGRICULTURAL  ECONOMICS 


in  the  northern  part  of  Nottinghamshire,  and  in  the  West  Riding 
of  Yorkshire.  In  some  of  these  regions  the  system  was  not 
giving  very  good  results.  In  Surrey,  the  custom  of  tenant-right 
was  said  to  be  "  promoting  an  extensive  system  of  fraud  and 
falsehood  among  the  farmers."  The  custom  seems  to  have 
been  quite  loosely  formulated  in  that  country,  and  it  was  possible 
for  the  farmers  to  "  work  up  a  quitting,"  as  it  was  called,^  and 
thus  defraud  the  landlord  or  the  succeeding  tenant.  Not  being 
properly  regulated  the  "  compensation  "  often  embraced  "  large 
payments  for  imaginary  improvements  and  alleged  operations, 
which,  even  if  they  had  ever  been  performed  would  be  more 
injurious  than  beneficial."  ^ 

But  while  the  custom  of  tenant-right  was  very  imperfect 
in  its  operations  in  some  parts  of  England,  the  principle  on  which 
it  was  based  was  sound,  and  in  time  it  was  to  be  embodied  in  the 
laws  of  the  land.  The  custom  of  tenant-right  struck  at  the 
very  heart  of  the  tenant  problem.  It  guaranteed  to  the  tenant 
just  returns  for  his  investments,  without  involving  the  many 
disadvantages  of  the  long-period  lease.  The  experience  of  the 
landlords  and  tenants  of  Lincolnshire  had  already  proved  that 
where  the  system  was  properly  regulated  the  custom  of  tenant- 
right  was  satisfactory  in  practice  as  well  as  sound  in  principle. 
In  1850  a  bill  was  introduced  in  ParHament  which  aimed 
at  the  embodiment  of  this  custom  of  tenant-right  into  a  law. 
It  was  entitled  "  A  Bill  for  the  Improvement  of  the  Relation 
between  Landlord  and  Tenant  in  England  and  Wales."  Its 
purpose,  as  stated  in  the  preamble,  was  to  insure  to  farmers 
compensation  for  properly  constructed,  permanent  improve- 
ments. The  idea  of  enacting  a  law  of  this  kind  was  not  new 
in  1850.  Two  hundred  years  before,  Walter  Blith  advised  that 
a  law  be  enacted  "  whereby  every  landlord  should  be  obliged 
.  .  .  to"give  him  [the  tenant]  reasonable  allowance  for  his  clear 
improvements."  The  bill  of  1850  did  not  pass,  but  neither  did 
it  die.  Again  and  again  similar  bills  were  brought  before  Parlia- 
ment, and  in  1875  an  act  was  passed,  which  laid  down  the 
conditions  for  compensating  the  outgoing  tenant,  but  unfor- 
1  Caird's  "English  Agriculture  in  1850  and  1851,  p.  119.  ^ Ibid.,  p.  119- 


RELATIONS  BETWEEN  LANDLORDS  AND  TENANTS      341 

tunately  no  provision  was  then  made  to  keep  the  landlords  from 
requiring  the  tenants  to  contract  themselves  out  of  the  right 
to  claim  compensation  under  the  law,  and  while  the  law  was 
beneficial  in  that  it  systematized  and  brought  greater  uniformity 
into  the  practice  of  granting  compensation  where  tenant-right 
was  recognized,  it  was  not  generally  adopted.  Even  the  author 
of  the  bill  asked  his  tenants  to  contract  themselves  out  of  the 
benefits  of  the  law  which  he  himself  had  framed. 

In  1883  a  new  bill,  the  Agricultural  Holdings  Act,  was  passed. 
This  Act  contained  a  clause  making  it  illegal  for  a  landlord  to 
contract  himself  out  of  the  conditions  of  the  law.  The  law  of 
1883,  with  the  slight  modifications  of  the  Acts  of  1900,  1906, 
1908, 1913,  and  1914,  is  still  in  force,  and  it  will  be  worth  while  to 
examine  it  with  considerable  care.  The  law  enables  the  tenant 
farmers  to  obtain  from  the  landlords  as  compensation  for 
improvements  at  the  termination  of  their  tenancies,  "  such  sum 
as  fairly  represents  the  value  of  the  improvement  to  an  incoming 
tenant." 

The  improvements  for  which  compensation  could  be  claimed 
under  this  law  were  divided  into  three  classes.  The  first  class 
includes  all  those  improvements  to  which  the  consent  of  the  land- 
lord is  required  if  the  payment  of  compensation  is  to  be  enforced 
by  law.     This  class  includes  the  following  Hst  of  improvements : 

(i)  Erection,  alteration,  or  enlargement  of  buildings. 

(2)  Formation  of  silos. 

(3)  Laying  down  of  permanent  pasture. 

(4)  Making  and  planting  of  osier  beds. 

(s)  Making  of  water  meadows  or  works  of  irrigation. 

(6)  Making  of  gardens. 

(7)  Making  or  improving  of  roads  or  bridges. 

(8)  Making  or  improving  of  watercourses,  ponds,  wells,  or  reser- 
voirs, or  of  works  for  the  application  of  water  power  or  for  supply  of 
water  for  agricultural  or  domestic  purposes. 

(9)  Making  or  removal  of  permanent  fences. 

(10)  Planting  of  hops. 

(11)  Planting  of  orchards,  or  fruit  bushes. 

(12)  Protecting  young  friiit  trees. 

(13)  Reclaiming  of  waste  land. 


342  AGRICULTURAL  ECONOMICS 

(14)  Warping  or  weiring  of  land. 

(15)  Embankments  and  sluices  against  floods. 

(16)  The  erection  of  wirework  in  hop  gardens. 

[Note.  —  The  above  are  subject  to  the  provisions  given  under  the 
third  class  of  improvements  with  respect  to  market  gardens.] 

The  drainage  of  land  is  put  into  a  class  by  itself.  It  is  required 
that  the  tenant  shall  give  notice  to  the  landlord  of  his  intention 
to  construct  a  drainage  system  if  he  is  to  expect  compensation 
under  the  law  for  his  improvement.  This  notice  must  be  given 
not  more  than  three  months  nor  less  than  two  months  before 
the  beginning  of  the  execution  of  the  work,  and  during  this  time 
the  landlord  may,  if  the  tenant  has  not  in  the  meantime  with- 
drawn the  notice,  "  undertake  to  execute  the  improvement 
himself,  and  may  execute  the  same  in  any  reasonable  and  proper 
manner  which  he  thinks  fit,  and  charge  the  tenant  with  a  sum 
not  exceeding  five  pounds  per  centum  per  annum  on  the  outlay 
incurred  in  executing  the  improvement,  or  not  exceeding  such 
annual  sum  payable  for  a  period  of  twenty-five  years  as  will 
repay  such  outlay  in  the  said  period,  with  interest  at  the  rate 
of  three  per  centum  per  annum,  such  annual  sum  to  be  recover- 
able as  rent.  In  default  of  any  such  .  .  .  undertaking,  and  also 
in  the  event  of  the  landlord  failing  to  comply  with  his  under- 
taking within  a  reasonable  time,  the  tenant  may  execute  the 
improvement  himself,  and  shall  in  respect  thereof  be  entitled  to 
compensation  "  under  the  Agricultural  Holdings  Act. 

The  third  class  includes  a  large  number  of  improvements  for 
which  compensation  can  be  claimed  under  the  law,  without 
having  gained  the  consent  of  the  landlord  or  having  given  notice 
to  him  previous  to  the  execution  of  such  improvements.  The 
list  of  improvements  put  into  this  class  is  as  follows : 

(18)  Chalking  land. 

(19)  Clay  burning. 

(20)  Claying  of  land,  or  spreading  blaes  upon  land. 

(21)  Liming  of  land. 

(22)  Marling  of  land. 

(23)  Application  to  land  of  purchased  artificial  or  other  purchased 
manure. 


RELATIONS   BETWEEN  LANDLORDS  AND  TENANTS      343 

(24)  Consumption  on  the  holding  by  cattle,  sheep,  or  pigs,  or  by 
horses  other  than  those  regularly  employed  on  the  holding,  of  corn, 
cake,  or  other  feeding  stuff  not  produced  upon  the  holding. 

(25)  Consumption  on  the  holding  by  cattle,  sheep,  or  pigs,  or  by 
horses  other  than  those  regularly  employed  on  the  holding,  of  corn 
proved  by  satisfactory  evidence  to  have  been  produced  and  con- 
sumed on  the  holding. 

(26)  Laying  down  temporary  pasture  with  clover,  grass,  lucerne, 
sainfoin,  or  other  seeds  sown  more  than  two  years  prior  to  the  de- 
termination of  the  tenancy. 

(27)  Repairs  to  buildings,  being  buildings  necessary  for  the  proper 
cultivation  or  working  of  the  holding,  other  than  repair  which  the 
tenant  is  himself  under  an  obligation  to  execute.  This,  however, 
requires  notice  to  landlord. 

In  ascertaining  the  amount  of  compensation  payable  to  a 
tenant,  account  is  taken  of  any  benefit  which  the  landlord  has 
given  or  allowed  to  the  tenant  for  making  the  improvement. 
Also  in  case  the  tenant  is  under  contract  to  return  a  certain 
amount  of  manure  to  the  soil  each  year,  and  in  case  such  amount 
shall  not  exceed  the  amount  that  is  produced  from  the  feeds 
which  are  produced  upon  the  holding,  this  amount  is  excluded 
from  the  amount  for  which  compensation  can  be  claimed. 

In  case  the  landlord  and  the  tenant  fail  to  agree  as  to  the 
amount  of  compensation  which  the  tenant  should  have  for  the 
various  improvements  which  have  been  named  above,  the 
difference  is  settled  by  means  of  arbitration. 

In  case  of  any  breach  of  contract  on  the  part  of  either  land- 
lord or  tenant,  damages  may  be  claimed  by  the  party  injured. 
Also  in  case  the  tenant  causes  or  allows  any  waste,  injures  the 
soil,  or  destroys  the  improvements,  the  landlord  can  make  a 
claim  for  payment  for  such  injuries.  These  claims  are  arbitrated 
the  same  as  those  for  improvements. 

In  case  of  permanent  improvements  such  as  are  not  mentioned 
in  either  of  the  above  classes,  the  tenant  may  remove  the 
improvement  unless  the  landlord  may  choose  to  buy  the  same, 
with  the  proviso  that  he  repair  any  damages  which  may  have 
been  incurred  by  the  removal  of  the  building,  that  is,  he  must 


344  AGRICULTURAL  ECONOMICS 

leave  the  premises  in  as  good  condition  as  if  the  improvement 
had  not  been  made. 

It  is  the  usual  thing  for  the  incoming  tenant  to  pay  the  sum 
which  is  due  the  outgoing  tenant  as  remuneration  for  improve- 
ments; and  in  case  the  new  tenant  remains  but  a  short  time 
on  the  farm,  so  that  at  the  expiration  of  his  tenancy  he  has  not 
had  time  to  realize  in  full  upon  such  investments,  he  receives 
remuneration  for  such  improvements  just  the  same  as  if  he  had 
executed  them  himself. 

These  are  the  essential  points  of  the  Agricultural  Holdings 
Act  of  1883  as  modified  by  the  later  Acts.  In  igo8  two  impor- 
tant additions  were  made  to  the  law,  the  one  relating  to  damages 
to  crops  from  game,  and  compensation  for  unreasonable  disturbance. 
The  first  specifies  that  damage  to  crops  from  game  which  the 
tenant  has  no  right  to  take  shall  be  compensated  for  by  the 
landlord  if  the  damage  amounts  to  more  than  one  shilling  per 
acre  of  the  area  over  which  the  damage  extends.  In  order  to 
receive  compensation  the  tenant  must  give  notice  in  writing  to 
the  landlord  as  soon  as  may  be  after  the  damage  was  first  ob- 
served by  the  tenant  and  a  reasonable  opportunity  given  the 
landlord  to  inspect  the  damage. 

The  second  provides  for  compensation  for  unreasonable  dis- 
turbance of  the  tenant  who  is  removed  by  the  landlord  without 
good  and  sufficient  cause  or  who  finds  it  necessary  to  move 
because  of  demands  for  increased  rents,  demanded  by  reason 
of  an  increase  in  the  value  of  the  holding  due  to  improvements 
which  have  been  executed  by  or  at  the  cost  of  the  tenant,  and 
for  which  he  has  not,  either  directly  or  indirectly,  received  an 
equivalent  from  the  landlord.  The  tenant  may  claim  compen- 
sation for  the  loss  or  expense  directly  attributable  to  his  quitting 
the  holding  which  he  may  unavoidably  incur  upon  or  in  con- 
nection with  the  sale  or  removal  of  his  household  goods,  or  his 
implements  of  husbandry,  produce,  or  farm  stock  on  or  used 
in  connection  with  the  holding. 

The  law,  as  it  now  stands,  seems  to  supply  the  regulations 
necessary  to  an  amicable  adjustment  of  the  relations  between 
landlord  and  tenant  in  England. 


RELATIONS   BETWEEN  LANDLORDS  AND   TENANTS      345 

Tenancy  from  year  to  year  is  the  rule  in  England  to-day, 
and  no  question  is  raised  as  to  the  security  of  the  landlord  or  of 
the  tenant.  Either  party  may  bring  the  tenancy  to  a  close  at  the 
expiration  of  any  year,  by  giving  proper  notice.  Under  the 
act,  twelve  months'  notice  is  required,  but  by  special  agreement 
between  landlord  and  tenant  the  time  may  be  changed  to  six 
months.-^ 

Written  contracts  are  generally  used,  but  the  leading  agri- 
culturists of  the  country  agree  that  such  contracts  should  contain 
few  restrictions  upon  the  methods  of  farming,  except  that  the 
farm  shall  be  operated  in  accordance  with  the  rules  of  good 
husbandry.  Many  of  the  written  agreements  now  in  use  would, 
if  strictly  enforced,  bind  the  tenants  hand  and  foot ;  but  as  a 
matter  of  fact  many  of  these  covenants  are  recognized  to  be 
obsolete  and  others  are  "  winked  at "  by  the  landlords.  A 
study  of  the  written  agreements  nominally  in  force  at  the  present 
time  would,  in  themselves,  give  a  very  erroneous  idea  of  the 
actual  relations  between  landlords  and  tenants. 

The  farmers  and  the  landlords  of  England  have  quite  gen- 
erally come  to  recognize  that  liberty  and  honesty  are  essential 
to  success  in  agriculture.  The  writer  gradually  gained  the 
impression  by  coming  in  personal  contact  with  farmers  and  land- 
lords, or  more  often  the  agents  of  the  latter,  that  accompanying 
the  gradual  perfecting  of  the  Agricultural  Holdings  Act,  there 
has  been  the  growth  of  a  sense  of  justice  in  the  minds  of  both 
the  landlords  and  the  tenants.  This  sense  of  justice  is  all  the 
more  effective  because  it  is  accompanied  by  the  belief  that  in 
farm  management,  whatever  is  beneficial  to  the  farmer  is  like- 
wise advantageous  to  the  landlord. 

The  English  method  of  regulating  the  relations  between 
landlord  and  tenant  is  successful  throughout  Great  Britain. 
The  history  of  land  tenure  in  Scotland  would  prove  very  inter- 
esting and  helpful.  Leases  of  long  duration,  most  commonly 
for  nineteen  or  for  twenty-one  years,  have  been  in  general  use 

1  The  Agricultural  Holdings  Act  as  now  in  force  may  be  found  in  convenient  form 
in  the  Journal  of  Ike  Royal  Agricultural  Society  of  England,  third  series.  Vol.  XI, 
Part  III,  1900. 


346  AGRICULTURAL  ECONOMICS 

in  Scotland  for  more  than  a  century.  The  system  of  "  corn 
rents,"  already  referred  to,  proved  an  effective  means  of  adjust- 
ing rents  to  prices  at  the  time  when  this  problem  was  proving 
disastrous  to  the  long-term  lease  in  England.  At  the  present 
time  the  Agricultural  Holdings  Act  of  Scotland  is  practically 
the  same  as  that  in  force  in  England.  While  it  continues  to  be 
the  custom  among  Scottish  landlords  and  tenants  to  have  long- 
term  leases  drawn,  it  has  become  the  common  thing  to  include 
a  clause  which  makes  it  possible  for  either  the  landlord  or  the 
tenant  to  bring  the  tenancy  to  a  close  at  certain  periods,  as  for 
example,  at  the  end  of  the  fifth,  tenth,  or  fifteenth  year,  or  at  the 
end  of  the  second,  fourth,  sixth,  etc.,  year,  by  giving  proper 
notice  to  the  other  party.  In  effect,  therefore,  the  long-term 
lease  is  passing  away,  for  the  same  object  is  now  attained  through 
the  Agricultural  Holdings  Act. 

In  another  connection  the  writer  had  occasion  to  pubUsh  the 
statement  that,  "  the  relation  between  landlord  and  tenant  is 
very  satisfactorily  arranged,  the  farmers  are,  as  a  rule,  contented 
with  the  present  system,  and  the  fields  of  England  prove  that 
landownership  on  the  part  of  farmers  is  not  essential  to  good 
agriculture."  This  statement  has  occasioned  surprise  on  the 
part  of  some  American  readers,  but  an  eminent  agriculturist 
of  Great  Britain,  Mr.  John  Speir,  says  this  statement  "  expresses 
briefly  and  concisely  the  position  here."  The  writer  had  no 
thought  of  minimizing  the  importance  of  landownership  on  the 
part  of  farmers,  but  rather  to  emphasize  that  in  spite  of  the  fact 
that  tenancy  is  the  rule  in  that  country,  the  agriculture  of 
England  is,  in  many  ways,  worthy  of  our  emulation,  and  that 
this  advanced  position  of  English  agriculture  is  due,  in  a  great 
measure,  to  an  excellent  system  of  adjusting  the  relations 
between  landlord  and  tenant. 

That  Americans  may  profit  by  the  experience  of  their  British 
cousins  should  be  evident  from  the  foregoing  pages.  That  they 
will  be  wiUing  to  draw  upon  the  experience  of  the  EngUsh  will 
scarcely  be  questioned.  The  Americans  have  become  inde- 
pendent in  thought  and  action,  and  have  become  leaders  in 
nearly  every  line  to  which  they  have  turned  their  attention. 


RELATIONS   BETWEEN   LANDLORDS  AND  TENANTS      347 

yet  they  have  always  been  willing  to  accept  all  that  is  of  value 
in  the  achievements  of  other  countries,  and  we  believe  that  as 
America  has  profited  by  the  experience  of  the  English  in  the 
development  of  factory  legislation,  so  will  she  profit  by  a  study 
of  the  English  agrarian  legislation.'^ 

Covenants  Found  in  Norfolk  Farm  Leases,  by  W.  Marshall 

[The  following  description  of  the  Norfolk  leases  is  taken  from  the 
second  edition  of  William  Marshall's  "Rural  Economy  of 
Norfolk"  (1795),  pp.  70  to  80.] 

The  following  heads  of  a  lease  will  place  the  general  management 
of  a  Norfolk  estate  in  a  clear  and  comprehensive  point  of  view.  They 
are  not,  either  in  form  or  substance,  copied,  precisely,  from  the  lease 
in  use  upon  any  particular  estate ;  but  exhibit,  I  believe,  a  pretty 
faithful  outline  of  the  modern  Norfolk  lease. 

Landlord  agrees,  i.  To  let  certain  specified  premises,  for  a  term 
and  at  a  rent,  previously  agreed  upon. 

2.  Also  to  put  the  buildings,  gates,  and  fences  in  tenantable  repair. 

3.  Also  to  furnish  rough  materials,  and  pay  half  the  workmen's 
wages  in  keeping  them  in  repair,  during  the  term  of  the  demise; 
willful  or  negligent  damage  excepted. 

4.  Also  to  furnish  the  premises  with  such  ladders  as  may  be  wanted 
in  doing  repairs,  or  in  preserving  the  buildings,  in  case  of  high  winds, 
fire  in  chimneys,  etc.  (an  excellent  clause). 

5.  Also  to  furnish  rough  materials  for  keeping  the  gates,  gate- 
posts, stiles,  etc.,  etc.,  in  repair;  or  to  furnish  the  materials  ready 
cut  out ;  tenant  paying  the  usual  price  of  labor  for  cutting  out. 

6.  Also  to  pay  half  the  expense  of  such  shores  and  ditches  as  he, 
or  his  agent,  shaU  direct  to  be  made  or  renewed. 

Landlord  reserves,  i.  All  minerals,  fossils,  marls,  clays;  with 
liberty  to  work  mines,  quarries,  and  pits,  and  to  burn  lime  and  bricks 
upon  the  premises ;  likewise  to  carry  away  such  minerals,  etc.,  etc. ; 
excepting  such  marl,  or  clay,  as  may  be  wanted  for  the  improvement 
of  the  farm. 

2.  Also,  all  timber  trees,  and  other  trees  and  woods,  imderwood 
and  hedgewood;  with  Hberty  to  fell,  convert,  char,  and  carry  off 
such  timber  or  other  woods ;  excepting  such  thorns  and  bushes  as 
shall  be  set  out  by  landlord,  for  making  and  repairing  fences ;   pro- 

1  Ths  Agricultural  Holdings  Acts,  1008-1914,  by  T.  C.  Jackson. 


348  AGRICULTURAL  ECONOMICS 

vided  the  thorns,  etc.,  so  set  out  be  cut  in  the  winter  months;  ex- 
cepting, however,  out  of  this  proviso,  such  few  as  may  be  wanted  in 
the  course  of  the  summer  months,  for  stopping  accidental  gaps. 

3.  Also,  full  liberty  of  planting  timber  trees  in  hedges,  or  on 
hedgebanks ;  with  a  power  to  take  to  himself,  after  twelve  months' 
notice  given,  some  certain  number  of  acres  of  land  for  the  purpose  of 
raising  timber  trees,  other  trees,  or  underwood;  allowing  the  ten- 
ant such  yearly  rent,  etc.,  for  the  land  so  taken,  as  two  arbitrators 
shall  fix. 

4.  Also,  a  power  of  altering  roads,  and  of  inclosing  commons,  or 
waste  lands,  without  the  control  of  the  tenant ;  to  which  intent,  all 
common-right  is  usually  reserved,  in  form,  though  seldom  in  effect,  to 
the  landlord. 

5.  Also,  the  customary  liberty  to  view  the  buildings,  do  repairs, 
and,  consequently,  to  bring  and  lay  materials. 

6.  Lastly,  the  right  of  sporting  and  destroying  vermin. 

Tenant  agrees,  i.  To  pay  the  stipulated  rent  half-yearly;  and 
within  thirty  days  after  it  be  due;  under  forfeiture  of  the  lease; 
and  further,  to  pay  the  last  half-year's  rent  two  months,  or  a  longer 
time,  before  the  expiration  of  the  term. 

2.  Also,  to  do  all  carriage  for  repairs  (within  a  specified  distance) ; 
and  to  find  all  ironwork  and  naUs ;  and  to  furnish  wheat-straw  for 
thatching;  and  to  pay  half  the  workmen's  wages,  and  find  them 
with  small  beer. 

3.  Also,  to  do  all  ditching,  etc.,  set  out  by  landlord  (provided  the 
quantity  set  out  do  not  exceed  one  tenth  of  the  whole) ;  and  to  pay 
half  the  workmen's  wages,  and  find  them  in  small  beer ;  and  to  defend 
with  hurdles,  or  otherwise,  all  such  young  hedges  as  shall  be  exposed, 
in  spring  and  summer,  to  the  browsings  of  pasturing  stock. 

4.  Also,  to  make,  or  pay  for  making,  such  gates,  etc.,  as  shall  be 
wanted  upon  the  farm  during  the  term  of  the  demise ;  and  to  hew, 
or  to  pay  for  hewing,  all  necessary  gateposts ;  and  to  put  down  and 
hang,  in  a  workmanlike  manner,  such  gates  and  gateposts  at  his  own 
sole  expense;  as  well  as  keep  all  the  old  gates  on  the  premises  in 
tenantable  repair. 

5.  Also,  not  to  assign  over,  nor  in  any  other  way,  part  with  pos- 
session of  his  farm ;  but  to  make  it  his  constant  residence  during  the 
term  of  the  lease.  Nor  to  take  any  other  farm;  nor  to  purchase 
any  lands  adjoining,  or  intermixed  with  it ;  without  the  license  and 
consent  of  landlord ;  under  forfeiture  of  the  lease. 


RELATIONS   BETWEEN   LANDLORDS  AND  TENANTS      349 

6.  Also,  not  to  break  up  any  meadow,  pasture,  or  furze  ground, 
under  the  penalty  of  ten  pounds  an  acre  a  year.  Nor  to  cut  "flags," 
that  is,  turves,  under  fifty  shillings  a  hundred. 

7.  Also,  not  to  lop  or  top  any  timber  tree,  under  the  penalty  of 
twenty  pounds ;  nor  other  tree,  under  ten  pounds ;  nor  cut  under- 
wood or  hedgewood  (except  as  before  excepted)  under  ten  pounds  a 
load.  But,  on  the  contrary,  to  preserve  them  from  damage  as  much 
as  may  be ;  and,  if  damaged  by  others,  to  give  every  information 
in  his  power  under  the  penalty  of  twenty  pounds. 

8.  Also,  not  to  take  more  than  two  crops  of  corn  without  a  whole 
year's  fallow,  —  a  crop  of  turnips,  twice  hoed,  —  or  a  two  years'  lay, 
—  intervening,  under  the  penalty  of  .  .  . 

9.  Also,  to  consume  on  the  premises  all  hay,  straw,  and  other 
stover;  and  not  to  carry  off,  or  suffer  to  be  carried  off,  any  part, 
under  pretense  of  being  tithe  compounded  for,  or  under  any  other 
pretense  whatever,  under  the  penalty  of  ten  pounds,  for  every  load 
carried  off  .  .  . 

10.  Nor  to  carry  off,  nor  to  suffer  to  be  carried  off,  any  dung,  muck, 
etc.,  under  five  pounds  a  load. 

11.  Nor  to  impair  the  foundations  of  the  buildings  round  the  dung- 
yard,  by  scooping  out  the  bottom  of  the  yard  too  near  the  buildings ; 
but  to  keep  up  a  pathway  three  feet  wide  between  the  dvmgpit  and 
the  foundations  (an  excellent  clause). 

12.  Also,  not  to  stock  any  part  of  the  premises  with  rabbits;  but 
to  endeavor,  as  much  as  may  be,  to  destroy  them. 

13.  Also,  during  the  last  two  years  of  the  lease,  not  to  take  in  any 
agistment  stock. 

14.  Also,  in  the  last  year,  not  to  suffer  swine  to  go  loose  without 
being  yoked  and  rung. 

15.  Also,  in  the  last  year,  to  permit  landlord,  or  incoming  tenant  to 
sow  grass  seeds  over  the  summer  corn ;  and  to  harrow  them  in,  gratis ; 
and  not  to  feed  off  the  young  grasses  after  harvest. 

16.  Also,  in  the  last  year,  not  to  sow  less  than  .  .  .  acres  of  fallow, 
of,  at  least,  three  plowings  and  suitable  harrowings,  with  two  pints 
an  acre  of  good,  marketable,  white-loaf  turnip  seed;  and,  in  due 
time,  to  give  the  plants  two  hoeings  {or,  if  the  crop  miss,  to  give  the 
fallow  two  extra  plowings)  in  a  husbandlike  manner;  and,  at  the 
expiration  of  the  term,  to  leave  such  turnips  growing  on  the  premises ; 
free  from  willful  or  neglectful  injury;  under  the  penalty  of  .  .  . 
pounds  an  acre. 


35©  AGRICULTURAL  ECONOMICS 

17.  Also,  to  permit  the  landlord  or  incoming  tenant  to  begin,  on 
or  after  the  first  day  of  July,  in  the  last  year,  to  break  up  the  two 
years'  lay  (hereafter  agreed  to  be  left)  for  wheat  fallow,  or  any  other 
purpose ;  and  to  harrow,  stir,  and  work  the  said  fallows ;  and  to 
carry  and  spread  dung  or  other  manure  thereon,  without  molestation. 

18.  Also,  in  the  last  year,  to  permit  landlord,  or  incoming  tenant, 
to  lay  up  hay,  or  other  fodder,  on  the  premises,  and  to  protect  it 
thereon. 

19.  Also,  to  lay  up  and  leave  upon  the  premises,  at  the  expiration 
of  the  lease,  all  the  hay  of  the  last  year  (or  of  any  preceding  year,  if 
unconsumed  at  the  expiration  of  the  term)  except  .  .  .  loads,  which 
tenant  is  allowed  to  carry  off. 

20.  Also,  to  lay  up,  in  the  usual  barns  and  rickyards,  the  last 
year's  crops  of  corn;  together  with  the  tithe,  if  compounded  for; 
and  to  thresh  them  out  in  proper  season ;  and  in  such  manner  that 
the  straw,  chaff,  and  colder  shall  be  injured  as  little  as  may  be. 

21.  Also,  at  the  expiration  of  the  term,  to  leave  no  less  than  .  .  . 
acres  of  olland  [meadow-land,  HteraUy  old-land],  of  two  years  laying 
(including  that  which  may  have  been  broken  up  by  landlord  or  in- 
coming tenant)  and  which  shall  have  been  laid  down  in  a  husbandlike 
manner,  after  turnips  or  a  summer  fallow,  with  not  less  than  twelve 
pounds  of  clover,  and  half  a  peck  of  ray  grass,  seeds  an  acre  — 
under  the  penalty  of  .  .  .  pound  an  acre.  Also  not  less  than  .  .  . 
acres  of  olland,  of  one  year's  laying,  to  be  laid  down  as  above  specified, 
under  the  penalty  of  .  .  .  pound  an  acre. 

22.  Also,  at  the  expiration  of  the  term,  to  leave  aU  the  yard  manure, 
produced  in  the  last  year  of  the  lease,  piled  up  in  a  husbandlike 
manner,  on  the  premises ;  excepting  such  part  of  it  as  may  have 
been  used  for  the  turnip  crop ;  and  excepting  such  other  part  as  may 
have  been  used  by  landlord,  or  incoming  tenant,  for  wheat. 

23.  Also,  at  the  expiration  of  the  term,  to  leave  the  buUdings,  ladders, 
gates,  fences,  watercourses,  etc.,  etc.,  in  good  and  tenantable  repair; 
landlord  in  this,  as  in  every  other  case,  performing  his  part  as  above 
agreed  to.  Also,  upon  such  parts  of  an  estate  as  lie  near  the  residence 
of  the  owner,  it  is  customary  for  the  tenant  to  agree  to  furnish  an- 
nually, a  certain  nimiber  of  loads  of  straw,  according  to  the  size  of 
his  farm ;  also  to  do  the  carriage  of  a  certain  number  of  loads  of  coal ; 
also  to  keep  dogs,  warn  off  sportsmen,  and  suffer  them  to  be  prose- 
cuted in  his  name :  remnants,  these,  of  the  ancient  base  tenures  of 
soccage  and  viUanage. 


RELATIONS   BETWEEN  LANDLORDS  AND   TENANTS      351 

Tenant  to  be  allowed,  i.  The  full  value  of  all  the  hay  left  upon  the 
premises,  of  the  last  year's  growth,  or  of  the  growth  of  any  preceding 
year ;  provided  the  quantity  of  old  hay  do  not  exceed  .  .  .  loads. 

2.  Also,  the  full  value  of  the  turnips  left  on  the  premises;  or  the 
accustomed  price  for  the  plowings,  harrowings,  and  manuring;  at 
his  own  option. 

3.  Also,  the  feedage  of  the  lays  broken  up,  by  the  landlord,  or  the 
incoming  tenant,  from  the  time  of  their  being  broken  up  until  the 
expiration  of  the  term  the  ensuing  Michaelmas ;  also,  for  all  damage 
arising  in  carrying  on  manure  or  otherwise. 

4.  Also,  the  feedage  of  the  young  clovers,  from  harvest  to  Michael- 
mas. 

5.  Also,  the  use  of  the  barns  and  rickyards  for  summer  corn  until 
Mayday ;  and  for  winter  corn  until  the  first  of  July  next  ensuing. 

6.  Also  (by  way  of  a  consideration  for  the  stover),  the  customary 
price  for  thrashing  and  dressing  the  corn ;  the  landlord,  or  incoming 
tenant,  also  carrying  the  same  to  market,  gratis:  provided  the  dis- 
tance required  to  be  carried  does  not  exceed  .  .  .  miles,  and  the 
quantity  required  to  be  carried,  at  one  journey,  be  not  less  than 
.  .  .  coombs.     [A  coomb  is  equivalent  to  four  bushels.] 

All  the  above  allowances  to  be  referred  to  two  arbitrators ;  one  to 
be  chosen  by  each  party,  in  Michaelmas  week;  and  the  amount 
awarded  to  be  immediately  paid  down  by  the  landlord,  or  the  in- 
coming tenant. 


CHAPTER  XXVI 
MARKETING  FARM   PRODUCTS 

The  problem.  Thus  far  we  have  studied  the  economic  prin- 
ciples which  underlie  the  activities  of  farmers  in  bringing  agri- 
cultural products  into  existence.  This  is  usually  called  the 
economics  of  production.  We  have  also  studied  the  economic 
forces  which  determine  the  share  of  the  farm  value  of  these 
commodities  which  goes  to  each  of  the  factors  of  production, 
namely,  as  wages  of  labor,  interest  and  depreciation  on  equip- 
ments, the  rent  of  land,  and  the  profits  of  management.  This 
division  of  returns  is  usually  called  the  distribution  of  wealth. 
We  now  turn  to  the  problems  of  marketing.  From  one  point 
of  view  marketing  is  a  productive  function  because  it  adds  place 
or  time  utility  to  commodities.  From  another  point  of  view 
the  economics  of  marketing  is  a  problem  in  distribution  because 
it  has  to  do  with  the  forces  and  conditions  which  determine  how 
the  dollar  paid  by  the  consumer  is  divided  among  the  men  who 
participate  in  the  supplying  of  the  article,  from  the  farmer  at 
the  one  end  to  the  retail  dealer  on  the  other  end  of  a  longer  or 
shorter  line  of  middlemen. 

We  are  interested  in  marketing  as  a  productive  activity  from 
the  point  of  view  of  introducing  economies  into  the  system 
and  thus  reducing  the  cost  of  the  service,  to  the  benefit  of  all 
concerned.  We  are  interested  in  the  marketing  problem  also 
from  the  standpoint  of  establishing  a  just  division  of  the  con- 
sumer's dollar  among  those  who  participate  in  providing  the 
product  at  the  point  where  the  consumer  gets  it.  This  has 
been  otherwise  designated  as  a  square  deal. 

Direct  sale.  Some  products  are  carried  by  the  producer  to 
the  consumer.  Milk  sold  in  a  small  city  is  a  good  example  of 
direct  sale.     Potatoes  and  garden  truck  are  sometimes  sold  in 

35« 


MARKETING  FARM   PRODUCTS  353 

this  way.  In  some  places  farmers  carry  their  produce  to  a 
market  place  to  which  the  consumers  come  to  make  purchases. 
These  sales  all  imply  close  proximity  of  producer  and  consumer 
and  hence  are  limited  to  goods  produced  in  the  neighborhood  of 
where  they  are  consumed. 

By  means  of  public  carriers  such  as  the  parcel  post,  the  ex- 
press companies,  and  the  railways,  farm  produce  may  be  carried 
great  distances  directly  to  consumers.  In  this  case  there  is,  of 
course,  one  intermediate  organization  which,  acting  as  an  agent, 
renders  a  middleman  service  for  a  fixed  rate  of  charge. 

Each  form  of  direct  sale  has  its  difiiculties.  Where  goods  are 
carried  directly  to  consumers  the  producer  and  consumer  must 
in  some  way  find  each  other  and  come  to  some  agreement  as  to 
terms  of  sale.  For  example,  a  farmer  who  lives  five  miles  from 
town  has  a  few  tons  of  timothy  hay  to  sell.  He  telephones  to 
the  liverymen,  the  ice  and  coal  men,  the  operator  of  the  sand 
pit,  because  these  men  keep  large  numbers  of  horses.  One 
liveryman  is  found  who  wants  one  load  of  hay  and  the  sand  man 
takes  one  load,  but  the  roads  are  good,  it  is  spring  before  work 
in  the  field  has  begun  and  other  farmers  are  anxious  to  sell  hay. 
So  many  farmers  offer  hay  at  the  market  price  that  the  buyers 
beUeve  the  market  will  break.  As  a  result  the  hay  is  left  at 
the  farm,  the  wagon  stands  empty,  the  horses  stand  munching 
hay  in  the  barn,  and  the  farmer  turns  to  his  wood  splitting.  By 
the  next  week  the  fields  are  dry  and  horses  and  men  are  pushing 
hard  to  get  the  oats  seeded.  Just  when  he  has  it  figured  out 
that  he  can  finish  a  given  field  by  Saturday  night,  the  telephone 
rings  and  the  sand  man  wants  a  big  load  of  hay  right  away  at 
the  old  price,  of  course,  at  which  he  did  not  care  to  stock  up 
when  the  farmer  was  free  to  haul,  for  he  is  out  of  hay  and  must 
have  a  load.  The  farmer  debates  the  matter  in  his  own  mind. 
Time  in  the  field  in  oat-sowing  is  very  valuable  —  possibly  as 
high  as  two  dollars  an  hour  for  a  man  and  team.  To  haul  a 
load  of  hay  will  take  a  man  and  team  five  hours,  making  an 
opportunity  cost  of  ten  dollars  to  haul  the  hay ;  whereas  if  the 
hay  could  have  been  hauled  when  field  work  could  not  be  done, 
the  opportunity  cost  would  have  been  no  more  than  a  dollar. 

8A 


354  AGRICULTURAL  ECONOMICS 

The  conclusion  arrived  at  is  as  follows :  I  can't  leave  my  crop 
work  to  haul  hay,  for  the  number  of  days  I  can  work  in  the  field 
is  very  limited  and  I  have  planned  all  the  field  work  which  can 
be  accomplished  during  the  available  time.  Hence  I  had  better 
sell  the  hay  for  much  less  and  choose  my  own  time  for  hauling 
it,  but  to  sell  it  all  and  choose  my  own  time  I  must  have  it 
baled  and  sell  it  to  the  feed  man  who  will  keep  it  in  stock  and 
sell  it  to  the  sand  man  when  he  wants  it.  Thus  after  some 
experience  the  thoughtful  farm  manager  decides  to  abandon 
the  direct  sale  of  hay,  and  yet  many  of  his  neighbors  sell  hay 
direct  and  deliver  it  when  it  is  wanted.  Many  market  gardeners 
have  tried  hawking  their  goods  on  the  streets,  or  standing  in  the 
market  place  awaiting  customers.  The  main  difficulty  is  that 
the  time  thus  spent  can  be  used  more  profitably  by  a  good 
gardener  working  on  his  farm.  The  result  is  that  the  more  suc- 
cessful gardeners  decide  to  sell  their  produce  wholesale  and 
devote  their  energy  to  the  problems  of  economy  in  production, 
leaving  the  retailing  of  garden  truck  to  those  who  are  at  the 
same  time  retaihng  other  things  also  and  making  a  business 
of  it. 

The  milk  business  succeeds  better  on  the  direct  sale  basis 
for  the  reason  that  a  line  of  customers  can  be  secured  who  take 
about  the  same  amount  of  milk  from  day  to  day.  When  the 
farmer's  milk  wagon  starts  out  each  morning  the  driver  knows 
where  he  is  going  and  to  whom  the  milk  will  be  sold.  If  the 
route  is  badly  scattered  this  becomes  an  expensive  system, 
but  for  farmers  living  near  the  city  there  seems  to  be  a  profit. 

One  of  the  main  difficulties  in  delivering  milk  from  the  farm  is 
the  producing  an  even  supply  of  milk  for  the  trade.  Some 
months  too  much  is  produced ;  other  months  not  enough. 
The  disposal  of  the  surplus  in  the  one  case  and  the  finding  of 
means  of  increasing  the  supply  at  another  time  worries  the 
farmer  milkman,  and  in  many  instances  makes  him  glad  to  leave 
the  distribution  of  milk  to  a  man  who  makes  that  his  business. 
The  larger  the  city  and  the  farther  the  farmer  has  to  drive  in 
order  to  get  to  his  customers,  the  more  desirable  it  is  to  introduce 
the  milk  dealer,  who  is  of  course  a  middleman. 


MARKETING  FARM   PRODUCTS  355 

Where  distances  are  too  great  for  the  meeting  of  producer  and 
consumer,  direct  shipment  may  be  resorted  to.  Butter,  eggs, 
pouhry,and  vegetables  have  been  shipped  to  special  customers. 
While  this  method  has  rarely  proved  cheaper  than  other  systems 
because  of  the  smallness  of  the  shipments  and  the  expense  of 
the  packages,  yet  it  has  proved  a  means  of  putting  high  quality 
produce  into  the  hands  of  those  who  appreciate  quality  and  are 
willing  to  pay  the  price. 

Sales  to  and  through  middlemen.  The  development  of 
modern  systems  of  transportation,  the  growth  of  great  indus- 
trial cities,  and  the  expansion  of  specialized  commercial  agri- 
culture has  brought  with  it  a  complex  middleman  system  which 
needs  to  be  studied  with  care  with  a  view  to  its  better  organiza- 
tion with  a  greater  economy  and  justice. 

For  some  articles  the  market  may  be  said  to  be  world-wide, 
because  the  entire  product  is  effective  in  determining  the  market 
price.  This  is  true  of  wheat,  wool,  cotton,  sugar,  tea,  silk,  and 
many  other  nonperishable  articles  in  general  use.  Liverpool 
has  for  a  long  time  been  the  central  wheat  market  of  the  world. 
Being  a  port  situated  on  the  outer  edge  of  the  wheat-deficit 
area  of  western  Europe,  Liverpool  became  the  objective  point  of 
shipments  of  wheat  from  all  wheat  ports  of  the  United  States, 
Canada,  South  America,  AustraHa,  New  Zealand,  India,  and 
Russia.  In  each  of  the  countries  producing  a  surplus  of  wheat, 
primary  wheat  markets  were  established  such  as  Chicago, 
MinneapoHs,  St.  Louis,  Kansas  City,  and  many  other  points 
to  which  the  wheat  is  shipped  from  the  farmer's  local  station. 
Thus  there  are  many  stages,  many  processes,  and  many  middle- 
men between  the  wheat  producer  and  the  bread  consumer. 
The  local  grain  dealer  buys  grain  at  all  times  in  any  quantity 
and  of  most  any  quality  the  farmer  has  to  sell.  He  holds  it  in 
his  warehouse  until  he  has  a  carload  lot  and  then  ships  it  to  a 
primary  market,  consigning  it  to  some  commission  firm  at  that 
point  for  sale.  At  this  point  the  wheat  may  be  milled  into 
flour  and  by-products  or  it  may  be  cleaned  and  graded  and 
reshipped  in  the  direction  of  the  wheat-deficit  areas  of  the  world. 
,  In  either  case,  owing  to  the  great  distance,  the  wheat  or  its 


356  AGRICULTURAL  ECONOMICS 

product  —  flour  —  is  sold  and  resold  many  times,  so  that 
while  many  men  handle  the  wheat  many  men  own  the  wheat, 
so  that  there  is  always  some  one  near  who  has  a  proprietary 
interest  in  the  wheat.  Do  these  men,  each  in  turn,  render  a 
service?  They  do.  Is  this  service  rendered  in  the  most  eco- 
nomical manner  and  for  a  just  charge  ?  This  question  is  not  so 
easily  answered,  and  here  lies  the  center  of  the  middleman 
problem.  This  is  the  real  issue  between  the  farmer  and  the 
middleman,  —  an  issue  which  has  not  been  well  defined  as  a 
rule  by  those  who  have  talked  most  about  it. 


CHAPTER  XXVII 
THE  FARMER  AND  THE  MIDDLEMAN 

During  the  past  ten  years  the  marketing  problem  has  come 
prominently  into  the  foreground.  To  some  it  has  appeared 
that  the  middleman  is  in  a  position  to  demand  that  his  basket 
be  filled  without  rendering  a  corresponding  service.  To  others 
it  has  appeared  that  the  present  system  of  marketing  is  waste- 
ful of  human  energy  because  there  are  too  many  middlemen. 
There  is  truth  in  both  of  these  suggestions,  but,  as  often  pre- 
sented by  the  cartoonist  and  by  the  excitement-loving  editor, 
much  besides  the  truth  is  conveyed  to  the  reading  public. 
Fortunately,  while  the  earlier  farmers'  conventions  dealing  with 
tliis  problem  indulged  largely  in  emotions  and  sentiments,  recent 
meetings  of  farmers  give  primary  attention  to  fact  and  reason. 

Our  pioneer  forefathers  were  not  confronted  with  the  modern 
marketing  problem.  Their  agriculture  was  conducted  more 
largely  wth  a  view  to  the  direct  satisfaction  of  their  own  wants. 
With  the  cheap  freight  rates  resulting  from  modern  methods  of 
transportation,  agriculture  has  become  commercial.  The  farmer 
produces  primarily  for  the  market,  and  the  farmers  of  the  dif- 
ferent parts  of  the  country  give  a  more  especial  attention  to 
some  one  or  two  lines  of  production.  For  example,  the  Dakotas 
produce  wheat ;  Iowa  markets  hogs  and  cattle ;  Wisconsin 
specializes  in  dairy  products  and  potatoes ;  Texas  sells  cotton 
and  cattle ;  and  other  states  like\^ase  have  their  specialties. 
Each  state  produces  a  large  surplus  of  a  few  articles  and  must 
buy  many  articles  from  other  states.  It  is  the  exchange  of 
these  specialties  which  brings  the  marketing  problem  into  the 
foreground. 

Those  who  criticize  modern  commercial  systems  as  wasteful 
are  certainly  not  comparing  the  present  system  with  that  of  the 

3S7 


358  AGRICULTURAL  ECONOMICS 

self-sufficing  economy  of  the  isolated  pioneer,  but  rather  with 
some  ideal  which  lies  as  a  possibility  of  the  future.  Commercial 
agriculture,  that  is,  production  primarily  for  the  market  and 
buying  upon  the  market  many  of  the  articles  consumed  by  the 
farmer,  is  more  productive  because:  (i)  each  agricultural 
territory  can  be  devoted  to  the  production  of  those  articles  for 
which  it  is  by  nature  especially  suited  ;  (2)  each  man  may  devote 
himself  to  the  Unes  of  agriculture  in  which  he  is  most  effective ; 
and  (3)  the  agricultural  classes  may  benefit  by  the  economies 
introduced  into  manufactures  by  machine  methods  and  large- 
scale  production.  To  appreciate  the  economic  significance 
of  the  change  from  the  self-sufficing  to  the  commercial  economy 
one  need  only  compare  the  comforts  enjoyed  by  the  modern 
farmer  with  those  of  the  pioneer. 

With  this  great  advantage  accruing  to  the  farmer  as  a  result 
of  the  commercial  system,  the  question  properly  arises  in  your 
minds,  what  are  the  farmers  kicking  about?  Why  are  they 
condemning  the  middleman  who  is  essential  to  the  commercial 
system?  This  is  the  question  the  writer  will  attempt  to 
answer. 

In  the  first  place  there  are  men  who  make  it  their  business 
to  stir  up  trouble.  These  men  take  a  few  more  or  less  well- 
established  facts  and  by  the  free  use  of  their  fertile  imaginations 
weave  a  fabrication  which  appeals  to  the  avarice  of  men.  It  is 
popular  in  this  type  of  agitation  to  make  a  statement  somewhat 
as  follows :  "  When  the  consumer  pays  a  dollar,  the  farmer 
gets  only  forty-eight  cents  "  ;  and  then  with  a  rolling  of  the  eyes 
and  a  stern,  excited  look  intended  to  imply  that  he  himself  has 
seen  many  of  the  thieves,  the  speaker  says, "  Who  gets  the  rest  ?  " 
The  reply  desired  is,  "  the  middlemen  —  the  thieving  middle- 
men." 

But  why  do  intelligent  farmers  listen  to  such  foolishness? 
For  a  very  simple  reason.  However  intelligent  they  may  be 
regarding  farming,  they  are  uneducated  on  the  subject  of  middle- 
man processes  and  the  costs  of  the  middleman  services.  Their 
honesty  and  good  faith  in  the  matter  is  demonstrated,  when, 
following  in  the  wake  of  the  "  middleman  swatters,"  the  wily 


THE   FARMER  AND   THE   MIDDLEMAN  359 

promoters  of  creameries  and  farmers'  packing  companies  call 
upon  them  for  liberal  stock  subscription,  at  least  ij^  per  cent 
of  which  is  available  for  paying  expenses  of  promotion. 

The  farmers  know  a  great  deal  about  producing  cotton  and 
wool  and  corn  and  hogs  and  wheat  and  cattle  and  dairy  prod- 
ucts, but  they  know  but  little  as  a  class  about  the  functions  of 
the  middlemen,  made  necessary  by  the  modern  commercial 
organization  of  industrial  society.  The  farmer  takes  cotton  or 
grain,  his  hogs  and  his  cattle,  or  his  milk  to  the  local  market  and 
surrenders  them  to  the  local  buyer.  Year  after  year  he  may 
see  the  train  pull  out  of  sight  around  the  curve  below  the  corner 
of  his  farm  without  any  clear  vision  of  what  happens  to  his 
products  from  that  point. 

In  the  main,  the  functions  of  middlemen  are  little  understood 
by  the  producers  or  by  the  consumers.  What  is  in  the  dark 
may  be  evil,  and  his  human  imagination  is  prone  to  draw  gro- 
tesque pictures  of  what  may  happen  in  the  realm  of  the  unknown. 
Thus  it  has  come  to  pass  that  the  producer  sometimes  covets 
the  whole  dollar  which  the  consumer  pays  for  his  products  and 
looks  with  disgust  at  the  fifty-two  cents  which  he  receives. 
This  is  a  fertile  field  for  sowing  the  seeds  of  discontent  and  there 
have  been  plenty  of  writers  and  cartoonists  ready  to  ride  the 
crest  of  the  wave  of  popularity  which  has  given  prominence 
in  recent  years  to  the  marketing  problem.  It  is  only  recently 
that  this  onslaught  has  been  participated  in  by  the  farmer. 
The  farmers  have  in  general  maintained  a  passive  part  while  the 
politicians  and  professional  agitators  have  played  the  leading 
role  with  the  paid  writers  and  cartoonists  as  emphatic  seconds. 

The  thing  that  is  needed  most  at  the  present  time  is  education 
on  this  question  of  middleman  processes.  It  is  not  the  writer's 
purpose  to  imply  that  the  producer  is  wrong  in  thinking  there 
may  be  an  injustice,  but  it  is  his  purpose  to  say  that  the  starting 
point  in  solving  the  marketing  problem  is  not  what  may  be 
imagined  about  middlemen  but  the  actual  facts  about  middleman 
services  and  middleman  charges.  This  is  a  problem  for  the 
scientist.  The  scientific  economist  should  turn  on  the  light 
so  that  all  may  see  the  truth.     He  should  study  carefully  and 


360  AGRICULTURAL  ECONOMICS 

describe  accurately  what  happens  to  a  product  from  the  time 
it  leaves  the  farm  until  it  reaches  the  consumer.  In  the  light 
of  these  facts  intelligent  and  safe  steps  may  be  taken  to  improve 
conditions,  whereas  legislation  striking  in  the  dark  stands  great 
chances  of  doing  harm  and  little  chance  of  doing  good. 

When  the  fog  is  cleared  away  the  true  character  of  the  issue 
may  come  into  view.  It  will  be  recognized  that,  in  general, 
middlemen  render  a  service.  The  real  issue  between  the  farmer 
and  the  middleman  relates  to  the  fairness  of  the  charge  made  for 
the  service.  That  more  economical  methods  may  be  introduced 
at  certain  stages  in  the  middleman  process  will  be  accepted 
without  debate.  A  survey  of  the  work  of  the  middlemen  which 
would  show  how  to  replan  the  route  from  producer  to  consumer, 
in  such  a  manner  as  to  shorten  the  line  and  reduce  the  number 
of  stops  and  the  amount  of  rehandling,  should  be  acceptable 
to  every  one  concerned.  The  wisest  middlemen  would  be  the 
first  to  accept  the  new  economies.  There  is  clearly  no  issue 
here  between  the  middleman  and  the  endmen.  The  real  issue 
then  is  the  fairness  of  the  charge  for  the  middleman  service. 

This  is  an  important  issue  from  the  farmer's  point  of  view. 
When  considering  the  prices  of  the  supply  of  farm  products  on 
hand  at  the  end  of  a  given  harvest  the  farmer  may  be  looked 
upon  as  the  residual  claimant.  He  gets  what  is  left  after  all 
charges  are  paid.  Every  expansion  of  middleman  charges,  with- 
out added  service  for  which  the  consumer  pays,  cuts  the  farmer's 
income ;   every  reduction  in  cost  increases  the  farmer's  profits. 

When  the  consumer  pays  the  retailer  a  dollar  for  potatoes, 
the  dollar  goes  into  the  retailer's  cash  register.  The  retailer 
may  have  to  take  eighty-three  cents  out  of  the  till  and  pay  it  to 
the  wholesale  dealer.  Other  parts  have  to  be  taken  out  to  pay 
store  rent,  clerks,  taxes,  delivery,  etc.,  but  we  shall  omit  the 
details  and  follow  the  main  course  of  the  remnant  of  the  dollar 
which  works  back  from  one  middleman  to  another  until  the 
farmer  is  greeted  with  his  residual  share.  The  wholesaler 
takes  out  seven  cents  and  passes  seventy-five  cents  over  to  the 
jobber,  who  pays  eight  cents  to  the  railway  company  and  keeps 
five  cents  for  his  own  service.     This  leaves  sixty-two  cents, 


THE  FARMER  AND  THE  MIDDLEMAN  36 1 

which  is  forwarded  to  the  potato  dealer  in  central  Wisconsin, 
who  takes  ten  cents  for  materials  furnished  (sacks,  car  linings, 
and  heat)  and  services  rendered.  The  cash  register  rings 
out  52  cents  to  the  farmer,  and  the  transaction  is  closed,  and 
the  question,  Who  gets  the  money  ?  is  answered  for  one  specific 
case.  Are  all  these  charges  fair?  This  is  the  real  issue  and 
of  course  the  burden  of  proof  is  on  those  who  raise  the  question. 
What  is  a  fair  charge?  That,  in  itself,  is  not  an  easy  question, 
but  equally  difl5cult  tasks  should  carry  equal  compensation  as 
nearly  as  possible  whether  it  be  farmer,  manufacturer  or  mer- 
chant. It  is  usually  considered  that  where  free  competition 
exists,  prices  tend  to  become  fair. 

Special  instances  may  be  mentioned  where  unfair  charges  are 
Ukely  to  occur. 

Along  the  railway  lines  in  the  grain-growing  regions  of  the 
United  States  there  are  many  country  stations  where  one  elevator 
can  easily  handle  all  the  business.  This  elevator  may  be  owned 
and  operated  by  an  independent  grain  buyer,  interested  in 
maximum  returns  for  his  services.  It  may  be  owned  by  a  line 
elevator  company  and  operated  by  their  hired  man,  or  it  may 
be  owned  by  the  farmers  who  load  grain  at  the  station  and 
operated  by  the  employee  of  the  farmers'  company.  Either  of 
these  methods  will  usually  provide  the  necessary  elevator 
service.  And  it  often  happens  that  the  same  man  will  handle 
the  grain.  The  question  that  interests  the  farmers  is.  How 
can  we  get  this  service  performed  satisfactorily  for  the  lowest 
cost?  Such  a  local  elevator  partakes  of  the  character  of  a 
natural  monopoly.  If  the  independent  operator  is  in  charge, 
he  can  make  a  monopoly  profit  which  looks  large  to  the  farmer 
and  which  attracts  the  attention  of  the  grain  merchants  at  the 
central  market.  To  introduce  competition  into  the  charge 
made  for  this  service,  the  independent  operator  is  replaced  by 
an  employee  who  works  for  a  competitive  wage.  Who,  then, 
gets  the  monopoly  gain  which  had  formerly  gone  to  the  opera- 
tor? The  employer,  of  course.  If  the  fine  elevator  company 
is  the  employer,  the  monopoly  charge  may  be  increased  due 
to  the  elimination  of  the  tendency  for  the  operators  at  different 


362  AGRICULTURAL  ECONOMICS 

Stations  to  compete  for  the  trade  in  the  middle  zone  between 
the  railway  stations.  On  the  other  hand,  if  the  elevator  is 
owned  by  the  farmers,  the  monopoly  gain  is  ehminated,  local 
prices  are  increased,  production  is  stimulated.  Increased 
supply  tends  to  lower  prices  to  consumers  and  thus  the  benefits 
of  cooperative  elevators  are  divided  between  the  farmers  and  the 
consumers. 

Another  example  of  what  often  appears  to  be  an  excessive 
charge  for  local  middleman  services  is  that  found  at  the  local 
stations  in  the  districts  from  which  potatoes  are  shipped. 
Upon  visiting  one  of  these  loading  stations  one  is  first  impressed 
with  the  fact  that  there  are  very  many  warehouses  at  each 
station  and  for  this  reason  may  assiune  that  monopoly  charges 
are  impossible.  As  a  matter  of  fact  an  excessive  number  of 
warehouses  and  potato  dealers,  as  well  as  an  excessive  number 
of  grocers  in  a  small  town,  may  result  in  price  agreements,  which 
give  basis  for  monopoly  charges  for  services  rendered.  It  is 
believed  by  many  that  a  condition  of  this  kind  has  at  times 
existed  in  the  potato  district  of  central  Wisconsin.  The  method 
of  eliminating  this  monopoly  has  been  the  introduction  of  the 
farmers'  warehouses,  where  the  service  is  performed  by  an 
employee  of  the  farmers,  working  for  a  competitive  wage. 

It  is  well  established  that  wherever  there  is  a  tendency  toward 
a  monopoly  charge  for  a  middleman  service  which  is  performed 
locally,  where  the  farmer  comes  in  contact  with  the  warehouse 
and  the  man  performing  this  service  whenever  he  sells  his  prod- 
ucts, cooperation  is  the  natural  and  effective  method  of 
eliminating  the  monopoly  charge  and  distributing  the  benefits 
widely  through  society. 

But  there  are  other  middleman  functions  which  are  not  under 
the  eye  of  the  farmer.  These  are  in  operation  at  the  central 
markets  and  beyond,  and  for  brevity  in  this  discussion  will  be 
called  central  market  functions  to  distinguish  them  from  the 
local  market  functions.  Examples  of  the  central  market  func- 
tions are  the  elevator  business  at  the  primary  grain  markets,  the 
packing  business,  and  the  distribution  of  potatoes,  dairy  prod- 
ucts, and  poultry.    The  problem  of  securing  the  services  of  the 


THE  FARMER  AND  THE  MIDDLEMAN  363 

middleman  in  the  central  market  at  a  fair  price  has  not  been  so 
nearly  solved  as  has  that  of  the  local  market.  Two  methods 
have  been  tried,  each  with  some  degree  of  success.  The  one 
method  is  state  regulation  or  control,  and  the  other  method  is 
cooperation.  Cooperation  may  be  on  the  part  of  consumers 
who  organize  to  reach  out  after  their  product,  or  cooperation 
may  be  on  the  part  of  producers  organized  to  reach  out  with 
their  produce  beyond  the  central  market  with  a  view  to  securing 
a  higher  price  for  their  product.  It  is  beHeved  that  both  of 
these  methods  should  be  resorted  to. 

Where  there  is  a  well-organized  system  of  marketing  capable 
of  absorbing  all  of  the  product  whenever  shipped,  as  is  true  of 
the  grain  business  and  the  packing  business,  it  would  seem  that 
state  or  Federal  regulation  is  the  best  method  of  establishing 
fair  play.  These  are  big  businesses  requiring  much  capital  and 
special  skill  and  carried  on  at  such  a  distance  that  the  farmer 
cannot  supervise  the  work.  He  must  trust  the  supervision  to 
others.  He  may  not  have  any  too  much  confidence  in  the  Gov- 
ernment, but  experience  will  teach  him  that  the  Government  is 
at  least  as  trustworthy  as  any  comprehensive  organization 
which  he  can  build  to  perform  this  function  of  securing  fair 
play. 

Where  there  is  no  well-organized  central  market  which  will 
absorb  all  the  product  and  send  it  on  to  its  final  destination,  the 
local  cooperative  company  often  finds  it  necessary  to  reach  out 
long  distances  for  a  market.  The  potato  market  will  serve 
as  an  example.  The  farmers'  produce  company  is  in  competi- 
tion with  the  big  line  companies  both  at  the  local  stations  and  in 
the  various  cities  throughout  the  country  where  the  potatoes 
are  consumed.  The  farmers'  company  can  handle  the  potatoes 
at  the  loading  station  appreciably  cheaper  than  can  the  line 
companies,  but  in  finding  a  market  for  the  limited  number  of 
cars  handled  by  one  warehouse,  in  competition  with  the  line 
companies  which  are  handling  from  twenty-five  to  fifty  times 
as  many  cars  in  a  year,  the  saving  is  largely  lost.  It  is  believed 
therefore  that  the  federation  of  local  companies  for  the  purpose 
of  finding  a  market  is  a  necessary  step  if  local  cooperation  is  to 


364  AGRICULTURAL   ECONOMICS 

reap  its  reward  in  the  marketing  of  potatoes.  In  general  it  is 
believed  that  where  there  are  no  well-established  central  mar- 
kets subject  to  Government  supervision,  farmers  will  have  to 
look  to  federated  local  companies  in  order  to  compete  success- 
fully in  the  distribution  of  their  products. 

The  success  of  the  Wisconsin  cheese  producers'  federation  gives 
ground  for  confidence  in  the  ability  of  farmers  to  handle  suc- 
cessfully the  distribution  of  their  products  in  distant  markets. 
This  organization  has  its  headquarters  at  Plymouth,  Wisconsin. 
Prior  to  its  organization  the  farmers  Hving  in  the  vicinity  of  a 
cheese  factory  met  once  a  year  and  hired  a  cheese  maker  to 
convert  their  milk  into  cheese  at  so  much  per  pound.  So  far 
as  could  be  determined  the  cheese  maker  did  not  get  any  too 
much  for  his  services.  But  the  cheese  was  sold  on  an  unregu- 
lated market  at  a  price  which  was  unsatisfactory  to  the  farmers. 

The  farmers  had  little  or  nothing  to  do  with  the  selling  of  the 
cheese.  They  left  this  function  to  the  cheese  maker,  who  had 
no  interest  except  the  getting  all  of  the  cheese  passed  as  first- 
grade  product,  as  he  had  agreed  to  stand  the  loss  if  the  product 
was  not  up  to  standard.  This  led  to  many  irregularities,  and 
left  the  farmer  in  a  position  to  take  whatever  was  handed  him. 
In  time  he  complained,  and  with  the  help  of  the  State  Board  of 
Public  Affairs  and  the  Agricultural  College  and  the  blessing  of 
a  local  leader  who  was  wilHng  to  work  for  nothing  and  board 
himself  in  good  missionary  fashion,  these  local  groups  of  dairy- 
men who  took  milk  to  the  same  factory  were  converted  into 
corporate  units  known  as  cheese  producers'  associations.  These 
in  turn  were  federated  into  the  cheese  producers'  federation. 
This  latter  organization  hired  an  experienced  salesman  to  sell 
the  product  of  over  forty  cheese  factories.  They  were  unable 
to  rent  space  in  the  public  cold  storage  warehouse  of  Plymouth. 
This  emergency  was  quickly  met  by  building  a  warehouse  for 
their  own  use.  Six  seasons  have  passed,  and  the  federation  has 
proved  an  unqualified  success.  This  gives  ground  for  the  beUef 
that  wherever  the  farmers  have  the  right  mettle  they  can 
cooperate  successfully  to  reach  out  into  the  central  markets. 

In  any  case  there  is  plenty  of  work  for  the  state  to  perform  in 


THE  FARMER  AND  THE  MIDDLEMAN  365 

solving  the  marketing  problems.  Local  cooperative  companies 
would  prosper  better  under  state  supervision,  especially  with 
respect  to  the  auditing  of  accounts.  Farmers'  federated  com- 
panies are  doubly  in  need  of  aid  and  supervision  in  order  to 
succeed  in  their  more  difficult  task.  But  a  still  more  important 
function  for  pubUc  authority  is  the  regulation  and  control  of 
private  corporations  dealing  in  farm  products  in  the  central 
markets  and  beyond. 

It  should  not  be  assumed,  however,  that  all  charges  are  unfair 
and  require  regulation.  Whenever  middleman  services  are  per- 
formed for  a  fair  charge,  and  it  is  beheved  that  this  is  true  of  a 
great  part  of  the  middleman  functions,  regulation  by  farmers  or 
by  government  is  but  sand  in  the  wheels  of  industry. 


CHAPTER  XXVIII 
PRICE-FIXING  AND   THE   COST   OF   FARM     PRODUCTS 

In  the  preceding  chapter  attention  has  been  called  to  the 
ways  in  which  farmers  may  cooperate  and  the  ways  in  which 
governments  may  regulate  the  activities  of  middlemen  with  a 
view  to  securing  fair  prices  for  farm  products.  In  this  chapter 
attention  will  be  given  to  the  question  of  price  regulation  as  a 
means  of  solving  the  marketing  problem. 

Many  who  in  the  past  have  been  satisfied  to  leave  the  fixing  of 
prices  of  farm  products  entirely  to  competitive  forces  operat- 
ing under  the  law  of  supply  and  demand  now  see  the  need  of 
commissions  to  adjust  prices.  The  Price  Commission,  to  be  suc- 
cessful, cannot  represent  a  class,  but  must  stand  for  economic 
justice  to  all  classes.  The  condition  and  needs  of  the  producer, 
the  distributor,  and  the  consumer  must  be  considered  with  equal 
care.  The  biggest  problem  in  price-fixing  is  to  get  the  facts 
needed  as  the  basis  of  action. 

For  many  years  the  idea  of  price  control  has  received  the  at- 
tention of  farmers  who  have  been  hard  pressed  to  make  both  ends 
meet.  Dollar  wheat  sounds  cheap  now,  but  at  one  time  it  looked 
Hke  a  cure-all  for  the  ills  of  the  Dakota  farmers.  The  control  of 
cotton  prices  has  often  been  talked  about  in  times  of  low  prices, 
and  the  price  of  Burley  tobacco  was  more  than  doubled  by  the 
concerted  action  of  farmers  in  holding  their  product  and  refrain- 
ing from  growing  a  crop  in  1908.  In  all  this  agitation  it  was 
argued  that  the  price  should  be  enough  to  pay  the  cost  of  produc- 
tion and  a  reasonable  profit.  This  point  of  view  stimulated  in- 
terest in  farm  cost  accounting  as  a  basis  for  price-fixing. 

The  United  States  Department  of  Agriculture  and  many  state 
experiment  stations  have  cooperated  with  farmers  in  keeping 
detailed  records  of  man  and  horse  labor,  the  use  of  equipment, 

366 


PRICE-FIXING  AND  THE  COST  OF  FARM   PRODUCTS      367 

and  other  elements  of  costs,  as  well  as  the  yield,  in  quantity  and 
value,  of  each  kind  of  product.  Occasionally  a  farmer  has  under- 
taken detailed  records  on  his  own  initiative  and  without  official 
aid,  but  the  clerical  work  necessary  for  keeping  a  complete  sys- 
tem of  cost  accounts  is  more  than  most  farmers  have  time  to  do. 

In  the  official  promotion  of  farm  cost  accounting,  the  purpose 
has  not  always  been  well  defined ;  but  there  have  been  at  least 
two  points  of  view.  A  position  taken  by  many  who  are  inter- 
ested in  the  marketing  problem  is  that  costs  should  be  known  in 
order  that  they  may  be  used  as  a  basis  of  price-fixing.  A  view 
held  by  men  interested  in  the  problems  of  farm  management  is 
that  cost  accounts  show  the  relative  profitableness  of  competing 
crops  and  Uve  stock  enterprises,  and  hence  give  the  starting  point 
for  scientific  farm  management. 

It  would  seem  that  the  Federal  Food  Administration  in  fixing 
the  price  of  wheat,  and  the  Chicago  Federal  Milk  Commission 
in  its  work  of  the  winter  of  1 918-19,  assumed  that  cost  of  pro- 
duction is  the  foundation  of  price-fixing,  yet  when  these  officials 
have  approached  the  final  problem  of  price-fixing,  they  have 
found  themselves  confronted  with  unexpected  difficulties. 

Why  all  this  difficulty  in  the  use  of  cost  accounts  as  a  basis 
of  price-fixing  ?  There  are  doubtless  many  reasons,  but  there  are 
three  of  unusual  importance.  First,  variation  in  costs ;  second, 
joint  costs ;  and  third,  disagreement  in  the  elements  of  costs. 
But  in  spite  of  these  difficulties,  accounting  may  be  used  in  price 
control. 

Variation  in  costs.  There  is  a  very  wide  range  in  cost  figures 
secured  by  careful  methods  of  accounting,  and  there  are  wide 
ranges  in  the  estimates  of  costs  by  different  producers.  On  the 
basis  of  a  farm  management  survey  made  on  51  farms  in  one 
dairy  district  in  Wisconsin,  the  return  per  dollar  of  annual  out- 
lay ranged  from  77  cents  to  $3.05.  The  results  of  the  Wisconsin 
Dairy  Cow  Competition  carried  on  in  1909-11  illustrated  this 
point.  The  return  per  dollar's  worth  of  feed  consumed  by  the 
398  cows  in  this  contest  varied  from  92  cents  to  $2.71 ;  the  aver- 
age of  the  best  ten  was  $2.38  worth  of  product  per  dollar's  worth 
of  feed  and  the  average  of  the  poorest  ten  was  $1.11. 


368  AGRICULTURAL  ECONOMICS 

With  wide  ranges  in  the  costs  of  production,  which  cost  shall 
be  accepted  as  the  basis  of  price-fixing  ?  The  average  has  been 
seriously  suggested  but  abandoned  in  disgust  when  it  has  been 
realized  that  a  price  fixed  on  the  basis  of  average  costs  would 
probably  result  in  a  loss  on  half  the  farms. 

The  marginal  or  greatest  costs  have  also  been  suggested. 
Economists  have  a  theory  that  prices  tend  to  equal  marginal 
costs ;  this  is  thought  to  be  true  because  it  is  assumed  that  the 
man  who  is  producing  at  a  loss  will  drop  out,  or,  if  the  supply 
is  short  the  price  will  rise  to  the  point  attracting  others  less  fa- 
vorably situated  to  enter  the  same  line  of  production,  thus 
tending  to  maintain  the  price  at  a  point  equal  to  the  greatest 
cost,  though  at  any  given  time  they  might  be  far  apart.  There 
^seems  to  be  some  relation,  therefore,  between  the  highest  cost 
necessary  to  produce  the  desired  supply  and  the  price  which  in 
the  long  run  will  have  to  be  paid  in  order  to  get  the  supply. 

Disagreements  regarding  cost  factors.  Determining  the 
price  at  which  to  charge  supphes  produced  upon  the  farm 
presents  further  difficulties  in  this  regard.  Shall  feeds  be 
charged  at  cost  of  production  or  at  market  price  ?  In  calculat- 
ing the  cost  of  a  1 91 8  corn  crop,  should  the  seed  corn  be  charged 
at  the  cost  of  production  or  at  the  market  price?  A  similar 
question  arises  with  respect  to  seed  potatoes.  In  figuring  the 
cost  of  milk  the  question  arises :  Should  the  hay,  the  oats,  and 
the  corn  produced  on  the  farm  be  charged  on  the  basis  of  cost 
of  production  or  at  the  market  price?  There  seems  to  be  an 
accepted  rule  of  accounting  which  gives  definite  directions  to 
charge  all  the  produced  supplies  at  cost  and  not  at  market 
price.  On  the  other  hand,  farm  cost  accountants  connected 
with  the  United  States  Department  of  Agriculture  and  the 
various  experiment  stations  have  quite  generally  charged  these 
produced  supplies  at  market  price  minus  the  cost  of  deHvering 
them  to  the  market. 

A  few  years  ago  when  the  point  of  view  was  that  of  proving 
that  dairying  was  profitable  and  an  industry  which  should  be 
stimulated  by  the  press  in  every  way  possible,  one  agricultural 
paper  held  tenaciously  to  the  old  accounting  rule  of  charging 


PRICE-FIXING  AND  THE  COST  OF  FARM   PRODUCTS     369 

feed  to  the  cows  at  cost  of  production  because  this  magnified  the 
profits  of  dairying  by  throwing  the  field  profits  into  the  dairy 
account.  Now  that  the  point  of  view  has  changed  and  the  price 
of  milk  is  looked  upon  as  the  objective  point  in  cow  cost  account- 
ing, this  same  paper  is  definitely  of  the  opinion  that  produced 
feeds  should  be  charged  to  the  cows  on  the  basis  of  market  price. 
It  is  not  difficult  therefore  to  understand  why  there  should  have 
been  two  opinions,  on  this  point,  before  the  Chicago  Milk  Com- 
mission. Each  party  accepts  the  rule  of  accounting  which  best 
serves  his  interest. 

If  there  were  two  methods  of  testing  the  amount  of  butter  fat 
in  milk,  one  of  which  favored  the  farmer  and  the  other  the  pur- 
chaser, this  same  alignment  of  the  interests  would  doubtless  be 
formed.  Fortunately  there  is  one  accurate  fat  test  accepted  by 
all,  hence  this  occasion  of  trouble  is  avoided.  What  is  needed  is 
to  settle  this  question  in  accounting  in  accordance  with  the 
economic  principles  underlying  the  case. 

Joint  costs.  The  typical  farm  provides  a  much  more  difficult 
accounting  problem  than  a  sawmill,  a  flour  mill,  or  a  steel 
mill.  The  problem  is  more  nearly  comparable  to  that  in  railway 
accounting,  where  one  expenditure  affects  a  great  number  of 
sources  of  income.  The  farmer  who 'produces  but  one  crop  is 
rare.  On  the  typical  dairy  farm,  corn,  small  grain,  clover  hay, 
and  pasture,  cattle,  horses,  and  hogs  are  all  produced.  The 
same  plows,  harrows,  and  horses  are  used  for  the  various  crops 
which  require  attention  at  different  seasons,  and  the  same 
laborers  are  used  for  crops  and  live  stock.  When  the  corn  is 
being  cultivated  the  corn  is  not  only  benefited  but  the  land  is 
being  put  into  better  condition  for  the  small  grain  crop  which 
will  be  grown  the  next  year.  When  the  land  is  prepared  for 
small  grain  the  seed  bed  for  the  clover  is  being  prepared,  while 
oats  or  barley  serves  as  a  nurse  crop  for  the  clover  plant,  which 
in  turn  is  able  to  draw  upon  the  nitrogen  of  the  air  and  provide 
plant  food  needed  for  its  own  growth  and  for  the  corn  crop 
which  is  to  follow.  Hence  the  costs  of  these  three  crops  are 
said  to  be  joint  costs. 

Under  these  circumstances,  suppose  it  is  found  that  the  oat 


370  AGRICULTURAL  ECONOMICS 

crop  costs  more  than  the  market  price,  that  the  cost  of  oats  is 
ten  cents  greater  than  the  price.  What  can  the  farmer  do  about 
it?  He  can  do  a  little  figuring  to  see  whether  or  not  another 
crop  which  requires  his  attention  at  the  same  periods  and  which 
serves  equally  well  as  a  nurse  crop,  barley  for  example,  can  be 
substituted  with  a  profit  or  with  a  smaller  loss.  If  not,  should 
the  farmer  cut  out  the  small  grain  crop?  Usually  not.  The 
total  cost  of  man  and  horse  labor  would  be  reduced  little  by 
omitting  the  oat  crop,  because  oats  and  corn  require  labor  at 
different  seasons  and  are  supplementary  to  each  other.  If  this 
crop  were  not  grown  the  hours  of  productive  labor  would  prob- 
ably be  reduced  and  the  average  charge  per  hour  for  labor 
applied  to  the  corn  would  be  greater. 

But  this  is  not  all.  Oats  are  used  as  a  nurse  crop  for  clover, 
and  while  it  may  be  possible  to  grow  clover  without  a  nurse  crop, 
this  would  cost  nearly  as  much  as  putting  in  the  oats.  Hence 
the  growing  of  small  grain  is  usually  the  cheapest  way  to  get 
a  seeding  of  clover,  and  where  clover  thrives  this  is  the  best  way 
to  secure  nitrogen  for  the  corn  crop.  Thus  it  is  the  joint  results 
of  the  joint  costs  which  are  important. 

Having  adopted  a  system  of  farming,  the  parts  of  it  should 
be  adhered  to  so  long  as  the  system  as  a  whole  continues  to  be 
attractive,  and  so  long  as  each  part  of  the  system  continues  to 
pay  better  than  the  substitute  which  is  competing  for  a  place  in 
the  system. 

The  corn,  oats,  and  clover  combination  is  not  a  complete  sys- 
tem of  farming  in  itself.  It  is  usually  combined  with  one  or 
more  hve  stock  enterprises.  Beef  cattle  and  hogs,  dairy  cattle 
and  hogs,  or  straight  dairying  may  be  combined  with  this  crop- 
ping system.  In  each  of  these  systems  there  are  many  instances 
of  joint  costs.  The  joint  cost  of  fattening  steers  and  hogs  is 
commonly  understood  among  feeders.  Where  butter  fat  and 
pigs  and  veal  calves  are  the  products  sold,  these  three  products 
have  elements  of  joint  cost.  Where  pure-bred  cattle  and  milk 
are  sold  the  costs  are  joint  and  inseparable ;  the  important  ques- 
tion relates  to  the  profit  of  the  system  as  a  whole. 

Where  grade  cows  are  purchased  and  used  for  the  production 


PRICE-FIXING  AND  THE  COST  OF  FARM   PRODUCTS      371 

of  city  milk  we  approach  more  nearly  to  a  specific  cost  of  a  spe- 
cific product  as  far  as  the  Hve  stock  industry  is  concerned,  with 
only  a  small  by-product  in  the  form  of  a  veal  calf.  And  yet 
this  type  of  dairying  has  its  costs  intermixed  with  the  system 
of  cropping,  notably  in  the  use  of  labor,  the  use  of  crops,  and 
the  provision  of  fertiHzer.  Hence,  in  mixed  farming,  joint  costs 
are  present  to  block  the  effort  to  arrive  at  the  cost  of  producing 
any  specific  farm  product. 

Where  two  articles  are  produced  as  a  result  of  the  same  work, 
the  combined  prices  of  the  two  tend  to  equal  the  greatest  neces- 
sary cost  of  producing  them,  but  the  price  of  each  article  is 
determined  separately  on  the  basis  of  supply  and  demand. 

Consumers  want  a  variety  of  things  produced  by  the  farmer. 
How  much  a  consumer  will  pay  for  a  given  article  depends  upon 
the  intensity  of  his  desire  for  it.  The  intensity  of  this  desire 
depends  upon  how  abundantly  he  has  been  suppHed.  The  more 
he  takes  the  less  he  will  pay  for  any  given  unit  of  the  goods. 
Unfortunately,  under  conditions  of  joint  costs  there  are  certain 
physical  facts  which  determine  the  ratios  in  which  goods  are  pro- 
duced, without  much  regard  to  the  ratios  of  the  intensity  of  the 
desire  for  them.  As  a  result  the  supply-demand  price  of  one 
product  may  be  higher  and  that  of  another  lower  than  the  cost, 
but  the  combination  of  crops  may  prove  profitable.  The  case 
is  similar  to  the  situation  in  the  oil  business.  GasoHne  and  kero- 
sene have  a  joint  cost ;  and  it  is  the  condition  of  the  market  and 
the  relative  proportion  in  which  they  are  obtainable  at  a  common 
cost  which  makes  the  price  of  gasoHne  nearly  twice  as  high  as 
that  of  kerosene  at  the  present  time. 

Total  farm  profits  and  price  regulation.  When  the  point  of 
view  of  total  farm  profits  is  accepted  the  problem  becomes  that 
of  so  regulating  prices  that  the  farmer  in  one  Hne  of  produc- 
tion may  reap  as  large  a  reward  as  he  could  earn  producing 
some  other  product,  or  else  of  helping  him  in  getting  into  some 
other  line  of  production.  By  looking  to  total  farm  profits  we 
avoid  many  of  the  difficulties  arising  out  of  differences  in  the 
costs  of  producing  a  given  article  by  different  men.  Even  if  it 
costs  one  man  2  cents  a  quart  to  produce  milk,  another  3  cents, 


372  AGRICULTURAL  ECONOMICS 

another  4  cents,  and  still  another  5  cents  a  quart  in  a  given 
city  milk  belt,  yet  each  of  these  men  may  be  doing  the  type 
of  farming  which  pays  him  best,  and  the  industry  may  be  stable 
so  long  as  relative  prices  remain  the  same.  Likewise  the  ques- 
tion of  joint  costs  is  avoided,  for  it  is  no  longer  a  question  of  the 
cost  of  a  specific  product,  but  of  comparing  the  total  farm  profits 
resulting  from  the  various  types  of  farming  and  from  the  dif- 
ferent competing  elements  in  each  kind  of  farming.  Further- 
more, the  question  of  charging  feed  at  market  price  or  cost  of 
production  would  seem  to  pass  with  the  effort  to  find  specific 
costs.  However,  something  akin  to  this  latter  problem  remains. 
The  farmer  may  compare  the  profits  he  would  make  if  he  sold 
his  corn,  oats,  and  hay  at  present  market  prices  instead  of 
feeding  them  to  cows  and  selling  milk.  In  this  he  should  not 
assume  that  if  the  community  turned  from  milk  selling  to 
crop  selling  the  prices  of  all  these  crops  would  be  what  they 
were  before  the  change,  neither  should  he  assume  that  his 
crops  would  yield  the  same  if  he  changed  to  grain  growing 
for  the  market.  Oats  and  com  are  used  directly  for  human 
food  and  have  many  other  uses,  and  are  so  easily  shipped  that 
there  would  continue  to  be  a  market  for  them  if  not  used  as  cow 
feed ;  but  clover  hay  is  a  stock  food  and  it  is  not  so  easily  mar- 
keted. The  important  alternatives  uses  for  clover  if  not  used  for 
cows  are  (i)  to  feed  to  beef  cattle,  (2)  to  sheep,  or  (3)  to  plow 
under  as  a  fertiHzer,  any  of  which  conserves  its  value  as  a  land 
builder  for  grain  growing.  Where  clover  has  entered  into 
commerce  it  has  usually  been  as  a  feed  for  dairy  cows.  When 
discarded  for  this  use,  therefore,  the  marketing  of  clover  hay 
could  not  be  counted  upon.  A  farmer  in  the  Chicago  milk 
district,  for  instance,  insists  that  it  pays  better  to  sell  grains 
and  plow  the  clover  under  than  to  make  clover  hay  and  feed  it  to 
live  stock.  He  is  practicing  this  system  and  is  satisfied.  In 
this  and  similar  cases  it  is  the  alternative  use  value  rather  than 
cost  or  present  market  price  which  becomes  the  basis  of  compar- 
ing the  profits  of  types  of  farming,  and  hence  the  basis  of  choice. 
,  This  means  that  formally  assigned  specific  costs  are  of  Uttle 
use  in  the  discussion  of  price-fixing   where  the  products  in 


PRICE-FIXING  AND  THE  COST  OF  FARM   PRODUCTS     373 

question  are  produced  under  condition  of  joint  costs.  It  does 
not  mean,  however,  that  cost  accounting  is  of  no  use  in  the  study 
of  this  problem ;  in  fact,  accounts  are  very  necessary,  but  in  a 
different  way  from  what  has  been  supposed.  Accounts  are 
useful  to  the  farmer  in  making  choice  of  crops  and  live  stock 
enterprises  and  his  methods  of  production.  Accounts  are 
useful  to  the  price  commissioner  in  estimating  the  price  necessary 
to  call  out  continuously  the  desired  supply  of  produce  of  a  given 
kind  and  of  suitable  quality.  For  these  purposes  specific  costs 
may  not  be  needed.  What  are  needed  are  figures  comparing 
the  profitableness  of  the  different  things  to  which  the  producer 
can  turn  his  attention.  The  alert  farmer  is  ever  figuring  on  the 
combination  of  crop  and  live  stock  production  which  will  pay 
him  best  with  a  given  price  schedule  and  with  given  costs  for 
land,  labor,  and  equipments. 

When  the  point  of  view  in  farm  cost  accounting  is  shifted 
from  specific  costs  to  comparison  of  profits  the  whole  problem  is 
much  simpHfied.  In  the  attempt  to  secure  specific  costs,  ac- 
counts had  to  be  kept  in  minute  detail  comprehending  every 
activity  and  economic  relation  of  the  farm.  As  soon  as  one 
shifts  to  the  point  of  view  of  comparing  the  profits  of  competing 
enterprises,  no  record  need  be  kept  unless  the  farmer  really  has 
a  choice  and  then  only  such  records  as  are  essential  to  answering 
the  question.  Does  this  pay  better  than  that?  For  example, 
the  farmer  in  southern  Wisconsin  has  a  choice  between  growing 
oats  and  barley.  In  order  to  make  a  wise  choice  on  this  point 
it  is  not  necessary  to  know  the  specific  cost  of  growing  either 
oats  or  barley.  All  that  is  necessary  is  to  know  differences  in 
costs  and  differences  in  the  value  of  the  crops.  In  this  case  the 
same  tools,  machinery,  horses,  and  men  are  used  at  essentially 
the  same  time  of  year  whether  the  farmer  grows  the  one  crop 
or  the  other.  These  common  items  of  cost  may  be  omitted,  for 
they  cancel  each  other  in  the  calculation.  When  put  in  this 
form  the  question  is  so  simple  that  almost  any  farmer  can  figure 
it  out  on  the  basis  of  such  facts  as  are  easily  available  by  keeping 
a  production  record  and  by  studying  price  quotations. 

The  milk  producer  has  a  number  of  ways  of  disposing  of  his 


374  AGRICULTURAL  ECONOMICS 

product.  He  may  sell  whole  milk  to  a  city,  or  a  condensery. 
He  may  take  his  milk  to  a  cheese  factory  and  carry  home  the 
whey,  or  he  may  separate  the  cream  and  sell  it  for  city  use  or  to 
a  butter  factory.  If  the  milk  is  marketed  through  the  cheese 
factory,  hog  production  is  introduced  as  a  supplementary  indus- 
try using  the  whey.  If  he  sells  cream,  calf  raising  and  pork 
production  may  be  combined  with  dairying  as  a  means  of  using 
the  skim  milk.  All  of  these  different  types  of  dairying  can  be 
based  upon  the  corn-oats-hay  cropping  system.  The  combina- 
tion a  given  farmer  should  choose  depends  upon  which  pays 
best  under  his  particular  conditions  of  production  and  marketing. 

The  dairy  farmer  has,  of  course,  other  alternatives.  He  can 
change  from  dairying  to  beef  and  pork  production,  based  upon 
the  same  field  crops.  Again,  he  can  abandon  cattle  and  hogs 
entirely,  grow  grain  to  sell  and  raise  horses  as  a  side-Une  to  use 
up  much  of  the  unsalable  roughage ;  but  in  figuring  the  merits 
of  this  last  system,  influence  upon  fertility  and  production  of 
grain  per  acre  should  not  be  ignored.  He  has  the  further  alter- 
native of  trying  his  fortune  in  the  city,  and  this  horn  of  the 
dilemma  has  frequently  been  the  choice. 

With  all  these  opportunities  before  them,  the  farmers  are  slow 
to  shift  from  one  thing  to  another  in  normal  times  because,  for  a 
given  community,  the  question  of  what  pays  best  becomes  fairly 
well  settled.  Near  the  cities,  whole  milk  of  high  quality  is  pro- 
duced under  sanitary  conditions  of  a  higher  standard  than  in 
other  dairy  regions.  Outside  of  the  milk  zone  there  are  scatter- 
ing cream  shippers  selected  mainly  with  respect  to  the  characters 
of  the  farmers  participating.  These  are  intermingled  with  the 
farmers  producing  for  the  creameries  and  cheese  factories.  The 
city  milk  zone  becomes  more  or  less  well  defined  with  the  bound- 
ary line  moving  out  a  little  farther  in  winter  and  contracting 
in  summer,  with  a  gradual  expansion  of  the  milk  zone  about  a 
growing  city. 

But  in  abnormal  times,  when  radical  changes  are  taking  place 
in  the  prices  of  all  these  competing  lines  of  production,  farmers 
with  their  eyes  upon  the  market  become  uneasy  and  unsettled 
in  their  convictions  as  to  what  to  produce.     The  fact  that  the 


PRICE-FIXING  AND  THE  COST  OF  FARM   PRODUCTS      375 

producer  of  city  milk  is  getting  more  than  he  ever  got  before 
is  not  a  sufficient  consolation  if  he  might  be  making  more  profits 
seUing  grain,  hogs,  and  butter  fat,  in  spite  of  the  fact  that  he 
has  gone  to  greater  expense  to  equip  his  farm  for  meeting 
the  requirements  of  the  city  ordinances.  It  is  this  unsettled 
condition  which  has  given  rise  to  the  recent  efforts  to  regulate 
prices. 

In  deciding  upon  a  fair  price  to  the  farmer  on  the  part  of  a 
commission  the  alternative  choices  of  the  farmer  become  the  basis 
for  a  rational  decision.  The  industry  should  be  made  attractive 
to  the  farmer  if  he  is  expected  to  remain  in  it.  But  what  is 
essential  to  make  a  given  system  of  farming  attractive  ?  Must 
it  pay  some  definite  labor  income  to  each  farmer  engaged  in  it  ? 
Apparently  not,  for  as  a  matter  of  fact  men  are  remaining  in 
each  type  of  farming  who  are  making  small  incomes  while  others 
are  making  very  large  incomes. 

Whether  or  not  a  man  should  continue  to  carry  on  a  given 
type  of  farming  depends  upon  his  opportunities  in  other  Unes  of 
farming  or  other  lines  than  farming.  If  there  is  no  better  out- 
look, if  he  is  doing  better  than  he  could  do  in  any  other  place,  he 
will  probably  continue  to  produce  the  supply  for  the  price  he  can 
get  and  look  to  methods  of  reducing  costs  as  a  means  of  increas- 
ing profits.  If  there  is  an  alternative  which  will  pay  him  much 
better,  which  should  he  do,  ask  that  his  price  be  lifted  to  the 
point  where  his  present  activities  will  pay  as  well  as  the  alterna- 
tive or  quietly  choose  the  better  paying  activity  ?  The  answer 
is  not  so  obvious  as  it  might  at  first  appear.  Shifting  is  often 
expensive,  and  there  is  usually  hope  that  conditions  will  change 
and  the  old  line  will  again  pay  better.  It  often  takes  a  genera- 
tion to  build  up  a  type  of  farming,  and  when  the  system  becomes 
unprofitable  a  serious  loss  is  suffered  before  readjustment  can  be 
made.  Yet  where  permanent  changes  in  market  conditions  have 
come  about,  changes  in  farming  are  necessary.  Where  read- 
justments should  be  made  it  is  believed  that  pubhc  expenditures 
to  aid  in  the  readjustment,  especially  by  means  of  educational 
campaigns,  may  often  be  more  desirable  than  price  hfting  as  a 
means  of  making  the  industry  profitable. 


376  AGRICULTURAL  ECONOMICS 

Here  is  work  for  price  commissioners  well  trained  in  agricul- 
tural economics,  who  will  ascertain  the  true  cause  of  price 
changes,  make  a  study  of  the  conditions  of  production,  and  advise 
the  farmers  in  making  readjustments  in  their  farm  management 
or  in  standing  by  their  old  lines  of  production  as  the  case  may 
warrant.  In  this  work  the  price  commissioner  should  not  forget 
that  the  well-being  of  the  farmer  is  just  as  important  as  that  of 
the  consumer,  and  that  in  the  long  run  prices  should  be  such  as 
will  make  farm  work  and  country  life  attractive. 

In  carrying  out  this  policy,  price  lifting  may  at  times  prove 
desirable.  This  is  most  likely  to  happen  in  case  of  articles  like 
milk  for  which  the  price  is  more  or  less  influenced  by  custom  and 
which  is  often  sold  at  the  same  price  for  long  periods  and  which 
for  this  reason  does  not  adjust  itself  quickly  enough  in  times  of 
radical  changes  in  the  general  price  level ;  but  wherever  isolated 
farmers  in  great  numbers  are  acting  individually  in  selling  their 
produce  to  great  corporations,  need  may  often  arise  for  price 
regulation  by  public  authority  to  maintain  the  public  interest. 

In  deciding  upon  prices  both  the  farmer  and  the  price  com- 
missioner should  keep  the  long-time  as  well  as  the  immediate 
effect  in  mind.  It  takes  decades  to  build  up  the  dairy  industry 
in  a  community.  Equipments  require  time  for  construction. 
Years  are  required  to  build  up  good  herds,  and  decades  are  re- 
quired to  train  a  whole  community  in  the  fine  art  of  producing 
high-class  milk.  When  such  a  community  is  diverted  from 
dairying  to  another  line  of  production,  the  farmers  suffer  a  great 
loss  while  making  the  change  and  while  adjusting  themselves  to 
new  lines  of  production,  after  which  they  may  again  prosper. 
But  if  the  farmers  are  needed  to  produce  the  supply  of  milk 
essential  to  the  welfare  of  the  people  of  the  city,  the  loss  of  skilled 
dairymen  will  result  in  a  heavy  loss  to  the  consumers,  who  will 
have  to  pay  higher  prices  for  milk,  and  probably  find  it  neces- 
sary to  lower  their  standards  with  respect  to  quality  in  order  to 
get  the  necessary  supply. 

Hence  it  is  the  long-time  averages  which  must  be  considered. 
The  records  of  one  year  may  indicate  that  the  profits  would  have 
been  greater  had  the  farmer  been  in  another  line  of  production, 


PRICE-FIXING  AND  THE  COST  OF  FARM  PRODUCTS      377 

similar  to  that  practiced  outside  of  the  city  milk  belt.  In  con- 
templating these  figures,  the  farmer  should  look  for  the  unusual 
conditions  which  have  made  this  true.  If  the  conditions  are 
temporary  he  should  hold  fast  to  his  present  line  and  recall  the 
years  when  his  profits  were  much  the  greater  because  he  was  in 
the  dairy  business. 

If,  however,  it  becomes  apparent  that  permanent  changes  in 
market  conditions  have  taken  place  which  account  for  the  change 
in  profits,  a  move  should  be  initiated  to  bring  about  a  readjust- 
ment of  the  farming  to  suit  the  new  market  conditions ;  possibly 
some  dairymen  should  change  to  other  lines  of  production.  But 
this  is  not  a  matter  for  hasty  action,  especially  in  the  case  of  the 
dairy  industry,  where  pubHc  welfare  is  at  stake  and  where  a 
change  has  far-reaching  effects  through  a  series  of  years. 

Changes  which  the  farmer  may  make  in  grain  production  or 
hog  production  may  be  quickly  readjusted,  but  not  so  with  milk 
production.  One's  ill  feelings  towards  other  people  should  not 
enter  one's  decision.  One  should  not  get  angry  and  sell  his  herd 
of  cows.  Cold  reason  should  form  the  basis  of  judgment.  It 
is  easy  to  disperse  a  good  dairy  herd,  but  it  takes  years  to  rebuild 
it.  A  much  safer  plan  is  to  cut  down  a  little  on  the  number  of 
cows  by  culling-out  the  less  profitable  ones  and  to  seU  some 
grain  or  hogs  in  addition  to  milk  rather  than  to  make  a  radical 
change  in  type  of  farming. 

If  the  profits  of  milk  production  are  temporarily  low  on  a 
large  share  of  the  farms  in  a  given  city  milk  belt,  due  to  short 
crops  of  grain  and  hay,  which  for  this  reason  must  be  shipped 
in  at  heavy  cost,  the  farmer  should  not  only  look  to  the  long- 
time average,  and  to  the  maintenance  of  his  market,  but  he 
should  recognize  the  occasion  of  his  loss,  namely,  the  short  crop, 
and  should  lay  this  loss  to  the  land  or  to  the  way  he  has  handled 
his  land  and  not  ask  that  the  consumer  should  pay  the  rent  on 
the  land  which  did  not  produce  the  feed  and  also  pay  for  the 
purchased  feed. 

The  farmer  should  not  be  too  insistent  upon  the  consumer's 
price  varying  exactly  with  his  costs  from  season  to  season  and 
from  year  to  year.    Custom  is  a  big  item  in  determining  what 


378  AGRICULTURAL  ECONOMICS 

people  will  eat.  So  long  as  prices  are  the  same  the  customer  is 
not  likely  to  change,  but  every  time  the  consumers'  price  changes, 
consumption  customs  are  shaken ;  and  the  more  violent  the 
change  the  more  likely  the  custom  is  to  be  upset.  It  is  not  only 
the  industry,  then,  but  the  market  which  may  be  damaged  by 
impassioned  actions. 

Just  as  it  is  by  comparing  profits  that  the  farmer  makes  choice 
of  types  of  farming,  so  it  is  by  comparing  prices  in  the  market 
that  the  consumer  makes  choice.  If  it  is  done  in  the  right  way, 
the  price  of  one  commodity  may  be  raised  as  rapidly  as  that  of 
its  substitute.  So  long  as  relative  prices  are  the  same,  the 
choices  may  be  expected  to  be  the  same.  If,  however,  much 
publicity  of  an  antagonistic  sort  accompanies  the  change  in  the 
price  of  one  article  while  the  change  in  another  is  accompanied 
by  shrewd  advertising  which  wins  the  sympathy  of  the  con- 
sumer, there  may  be  a  falling  off  in  the  demand  of  the  former  and 
an  increase  in  the  consumption  of  the  latter. 

Price  commissions  should  make  a  careful  study  of  the  amount 
and  character  of  the  product  demanded  at  various  prices  and  the 
character  and  amount  of  the  product  which  can  be  secured  at 
these  prices,  and  adjust  the  price  on  the  basis  of  maintaining  an 
equiUbrium  between  demand  and  supply  through  a  long  period. 
In  doing  this,  account  will  need  to  be  taken  of  the  substitutes 
to  which  the  consumer  may  turn,  as  well  as  profits  in  other  types 
of  farming  to  which  the  milk  producer  may  later  change  if  the 
price  is  fixed  too  low  compared  with  other  prices. 

The  forces  and  conditions  which  determine  supply  and  demand 
are  too  little  understood.  The  law  of  supply  and  demand  as  a 
price  regulator  does  not  always  give  satisfactory  results.  It 
might  be  made  to  work  much  more  equitably  under  the  guid- 
ance of  a  commission  than  when  influenced  by  the  unequal 
bargaining  power  of  great  distributing  corporations  on  the  one 
hand  and  of  the  isolated  producers  on  the  other. 

A  properly  organized  permanent  price  commission  might 
inaugurate  an  educational  program  which  would  improve  the 
mutual  attitude  of  mind  of  the  producer  and  consumer  toward 
each  other,  which  would  make  each  more  considerate  of  the 


PRICE-FIXING  AND  THE  COST  OF  FARM   PRODUCTS      379 

rights  of  the  other  that  are  in  the  long  run  fundamental  to  the 
interests  of  all  concerned. 

Furthermore,  such  a  commission,  well  informed  with  regard 
to  the  facts  of  production,  distribution,  and  consumption,  would 
form  a  desirable  medium  for  collective  bargaining  between  the 
organized  producers  on  the  one  hand  and  the  organized  distrib- 
utors on  the  other,  which  appears  to  be  the  logical  outcome  of 
recent  tendencies  and  which  would  appear  to  be  desirable 
wherever  large  numbers  of  isolated  farmers  are  selling  to  large 
corporations  such  as  the  milk  distributors  in  the  large  cities,  the 
packers  and  the  grain  dealers,  and  possibly  in  many  other  in- 
stances. Even  where  the  more  specific  functions  of  price-fixing 
are  unnecessary,  there  is  an  important  work  for  price  commis- 
sioners in  studying  market  conditions  and  the  conditions  of 
supply  and  in  educating  both  producer  and  consumer  to  rational 
action. 

Statistical  and  historical  methods  of  studying  prices  in  their 
relation  to  production  will  prove  valuable  to  price  commissioners. 
Cost  accounts  are  useful  but  should  be  supplemented  by  statis- 
tical studies  showing  the  effect  of  various  price  relations  upon 
supply  and  upon  demand  through  a  series  of  years.  It  will  be 
desirable  to  use  every  method  of  research  known  to  economic 
investigators  in  arriving  at  sound  bases  of  judgment  in  the 
control  of  prices. 


CHAPTER  XXIX 
THE   SOCIAL   SIDE   OF   FARM     LIFE  i 

The  growth  of  national  wealth  makes  possible  improvements 
in  the  conditions  of  life  in  the  farm  home  and  in  the  rural  com- 
munity. The  tendency  has  been  for  the  various  modern  con- 
veniences to  be  introduced  more  slowly  in  the  homes  of  the 
farmers  and  in  the  social  life  of  the  rural  communities  than  in  the 
more  densely  populated  centers.  This  is  true  partly  because  of 
the  greater  opportunity  for  human  contact  in  the  cities  than 
in  the  country,  partly  due  to  the  fact  that  some  of  the  city 
conveniences  can  be  provided  more  economically  on  a  large  than 
on  a  small  scale,  and  partly  to  the  fact  that  farmers  who  have 
been  prosperous  and  gained  a  competence  have  too  often  given 
their  attention  to  buying  more  land  rather  than  to  the  im- 
provement of  the  conditions  of  life  in  the  home  and  in  the 
social  group. 

Leaders  like  Sir  Horace  Plunkett  have  emphasized  that  with 
"  better  farming  and  better  business  "  should  go  "  better  liv- 
ing." The  natural  opportunities  for  a  full  life  are  better  in  the 
country  than  in  the  city.  It  is  now  practicable  to  bring  into  the 
rural  homes  the  conveniences  which  make  for  comfort.  The 
possibility  of  organizing  social  life  in  the  country  in  a  satisfactory 
manner  has  been  demonstrated  by  many  communities. 

In  order  that  greater  progress  may  be  made  in  bringing  about 
conditions  of  "  better  living  "  in  the  country  the  conditions  of 
farm  Hfe  are  being  studied  with  a  view  to  helping  farmers  in 
their  efforts  to  reach  out  for  the  better  things  of  life. 

Rural  hope.  The  progress  of  the  land  worker  up  the  ladder 
of  financial  independence  is  marked  by  a  continual  struggle  on  his 

'  This  chapter  was  prepared  especially  for  this  book  by  Dr.  J.  C.  Galpin  and 
Miss  E.  J.  Hoag. 

380 


THE  SOCIAL  SIDE  OF  FARM  LIFE  381 

part,  both  with  forces  within  himself,  which  he  often  fails  to  un- 
derstand and  control,  and  with  the  forces  of  the  outside  world 
which  limit  his  actions  in  striving  for  success.  He  encounters 
subtle  resistance  at  every  step  on  his  way,  yet  he  is  able  to  rise 
from  the  position  of  hired  laborer  to  that  of  tenant  farmer,  from 
the  position  of  tenant  farmer  owning  the  equipments  to  that 
of  owner  of  the  land  and  possessor  of  the  profit,  from  isolated 
farmer  to  member  of  an  organized  economic  group. 

Is  there  equal  hope  for  the  development  of  the  social  side 
of  the  farmer's  life  ?  Is  there  opportunity  for  growth  in  the 
cultural,  educational,  religious,  and  aesthetic  aspects  of  the  life 
of  the  farmer  and  his  family,  commensurate  with  its  economic 
progress  ?  It  is  the  aim  of  this  chapter  to  set  forth  the  elements 
of  the  social  side  of  farm  life,  so  as  to  disclose  the  basis  of  rural 
hope. 

The  Country  Life  Commission.  In  1908  Theodore  Roosevelt, 
then  President  of  the  United  States,  appointed  a  commission  on 
country  life,  for  the  purpose  of  gaining  such  information  and 
advice  as  would  enable  him  to  make  recommendations  to 
Congress  in  the  interest  of  better  country  living  conditions. 

President  Roosevelt's  letter  appointing  the  commission  affords 
a  good  introduction  to  the  study  of  the  social  side  of  our  farm 
life,  as  in  fact  it  may  be  considered  the  beginning  of  the  country 
life  movement  in  America.  The  following  sentiments  from 
the  letter  form  a  significant  admission  that  the  social  side  of 
farm  Hfe,  as  a  national  problem,  has  lain  outside  the  Hne  of  sight 
of  farmer,  on  the  one  hand,  and  statesman,  on  the  other : 

"  The  social  and  economic  institutions  of  the  open  country 
are  not  keeping  pace  with  the  development  of  the  nation  as  a 
whole.  .  .  .  The  farmer  must  first  of  all  grow  good  crops  in  order 
to  support  himself  and  his  family.  But  when  this  has  been 
secured,  the  effort  for  better  farming  should  cease  to  stand 
alone  and  should  be  accompanied  by  the  effort  for  better  business 
andbetter  Uvingon  thefarm.  .  .  .  Agriculture  is  not  the  whole 
of  country  Hfe.  The  great  rural  interests  are  human  interests, 
and  good  crops  are  of  little  value  to  the  farmer  unless  they  open 
the  door  to  a  good  kind  of  Hfe  on  the  farm.  .  .  .  How  can  the  life 


382  AGRICULTURAL  ECONOMICS 

of  the  farm  family  be  made  less  solitary,  fuller  of  opportunity, 
freer  from  drudgery,  more  comfortable,  happier,  and  more  at- 
tractive ?  .  .  .  How  can  life  on  the  farm  be  kept  on  the  highest 
level  ?  .  .  .  How  can  a  compelling  desire  to  live  on  the  farm  be 
aroused  in  the  children  that  are  born  on  the  farm  ?  ...  All  of 
these  questions  are  of  vital  importance,  not  only  to  the  farmer, 
but  to  the  whole  nation.  .  .  ,  There  is  no  more  important  person, 
measured  in  influence  upon  the  life  of  the  nation,  than  the 
farmer's  wife,  no  more  important  home  than  the  country  home, 
.  .  .  The  farmers  have  hitherto  had  less  than  their  full  share  of 
public  attention  along  the  lines  of  business  and  social  life. 
There  is  too  much  belief  among  all  our  people  that  the  prizes 
of  life  lie  away  from  the  farm.  "^ 

In  response  to  President  Roosevelt's  letter,  the  Country  Life 
Commission  made  an  analysis  of  the  main  deficiencies  in  country 
life,  and  suggested  remedies  for  the  deficiencies.  Three  impor- 
tant recommendations  were  handed  to  President  Roosevelt. 
First,  a  recommendation  was  made  for  a  comprehensive  plan  of 
study  or  survey  of  all  the  conditions  that  surround  the  people 
who  live  in  the  country.  The  commission  suggested  that  federal 
and  state  governments,  agricultural  colleges,  other  educational 
agencies,  organizations  of  various  types,  and  individual  students 
of  the  problem  be  brought  into  cooperation  for  the  great  work 
of  investigating  with  minute  care  all  agricultural  and  country 
life  conditions. 

Second,  a  campaign  for  rural  progress  was  mapped  out.  The 
commission  believed  there  should  be  held  state  and  national 
conferences  on  rural  progress,  designed  to  unite  the  interests  of 
education,  business  organization,  and  religion  into  one  forward 
movement  for  the  rebuilding  of  country  life. 

Third,  according  to  the  recommendations  of  the  commission, 
each  state  college  of  agriculture  should  be  empowered  to  organize 
as  soon  as  practicable  a  complete  department  of  college  exten- 
sion. The  work  should  include  such  forms  of  extension  teaching 
as  lectures,  bulletins,  reading  courses,  correspondence  courses, 
demonstration,  and  other  means  of  reaching  the  people  at  home 
'  The  Report  of  the  Country  Life  Commission. 


THE  SOCIAL  SIDE  OF   FARM  LIFE  383 

and  on  their  farms.  It  should  be  designed  to  forward  not  only 
the  business  of  agriculture,  but  sanitation,  education,  home- 
making,  and  all  the  intimate  interests  of  country  life. 

National  attention  centered  upon  the  farm  family.  The 
report  of  President  Roosevelt's  Country  Life  Commission  in 
December,  1908,  although  not  acted  upon  by  Congress  as  the 
President  had  looked  for,  aroused  universal  interest  in  country 
Ufe.  The  press  was  quick  to  give  wide  publicity  to  topics  which 
had  never  before  found  a  place  in  magazine  or  daily.  State 
conferences  on  country  hfe  matters,  drawing  together  rural 
people,  were  called  at  agricultural  colleges,  state  universities, 
and  normal  schools  in  nearly  every  section  of  the  United  States. 
Farmers'  organizations,  rehgious  bodies,  and  business  clubs 
were  centers  for  the  discussion  of  this  new  subject.  From  1909 
to  1914  city  daihes,  national  magazines,  and  country  weekUes 
devoted  constantly  increasing  space  to  country  Hfe  progress. 
In  1914  the  tragedy  of  the  World  War,  however,  quickly  reduced 
the  space  given  by  the  press  to  the  social  side  of  farm  life,  and 
forced  the  food  side  of  farm  Hfe  into  greater  prominence. 

However,  the  agitation  of  conference,  pulpit,  and  press  during 
the  five  years  succeeding  the  report  of  Roosevelt's  Country  Life 
Commission  report  left  a  distinct  trace  in  American  thought. 
National  attention  was  turned  to  the  human  beings  on  the  farm 
and  to  farm  Hfe  institutions.  There  was  at  once  an  arrest  of 
flippant  talk  about  the  farmer  and  his  family.  Country  foibles 
ceased  to  be  the  butt  of  jest,  and  earnest  effort  was  started  to 
understand  social  conditions  surrounding  the  land  worker. 

After  the  first  crop  of  superficial  opinions  and  remedies,  came 
a  determination  to  study  seriously  all  phases  of  human  life  as 
related  to  the  farm.  Commissions  were  appointed  in  the  field 
of  rural  religion,  rural  education,  rural  health  and  recreation. 
CoUeges  appointed  instructors  in  rural  Hfe,  and  "  rural  sociol- 
ogy "  became  a  claimant  for  a  place  among  the  sciences.  A 
group  of  young  rural  socio-economists  developed.  Theological 
curricula  began  to  give  attention  to  the  "  rural  church."  State 
boards  of  education  began  policies  of  redirection  of  rural 
schools.    University  extension  work  added  the  "  farm  house 


384  AGRICULTURAL  ECONOMICS 

and  home  "  to  its  projects,  and  agricultural  colleges  and  religious 
bodies  took  the  first  "  surveys  "  of  rural  life. 

Broad  interpretation.  To  thinking  people  the  country  life 
movement  is  not  in  any  sense  a  literary  revival  of  the  poetic 
appreciation  of  nature,  the  open  road,  the  pictured  sky,  and  the 
rural  landscape.  Nor  is  it  a  philanthropic  enthusiasm  with  an 
"  upUft  "  motive.  The  country  is  not  a  national,  out-of-the-way 
slum  to  be  cleaned  out.  Neither  is  the  movement  a  conscious 
class  struggle  of  farmer  against  townsman. 

But  rather  this  new  movement  is  to  be  interpreted  as  a  creed, 
a  belief,  if  you  please,  that  country  Kfe  has  latent  social  forces 
which  are  susceptible  of  development;  that  reorganization  of 
rural  forces  in  such  manner  as  to  replace  poorly  adjusted  social 
relations  with  natural  and  logical  adjustments  will  free  the 
farm  population  for  a  full  and  fair  hfe.  Those  most  closely 
in  touch  with  the  new  rural  hope  beheve  that  national  hfe,  yes, 
even  urban  life,  will  be  equally  benefited  by  a  development 
and  reorganization  of  country  hfe  and  its  institutions.  How 
far  this  rural  hope,  aroused  by  the  country  fife  movement,  is 
justified  by  the  facts  of  country  life,  labor,  and  struggle,  it  is 
our  purpose  to  determine  in  the  topics  which  follow. 

Rural  investigations.  The  Country  Life  Commission,  in  its 
list  of  deficiencies,  gave  prominence  to  "  a  lack  of  knowledge  on 
the  part  of  farmers  of  the  exact  agricultural  conditions  and  possi- 
bihties  of  their  regions.  .  .  .  The  time  has  now  come,"  the 
report  reads,  "  when  we  should  know  in  detail  what  our  agri- 
cultural resources  are.  .  .  .  We  cannot  make  the  best  and  most 
permanent  progress  in  the  developing  of  a  good  country  Hfe  until 
we  have  completed  a  very  careful  inventory  of  the  entire  country. 
.  .  .  This  would  result  in  the  collection  of  local  fact,  on  which  we 
could  proceed  to  build  a  scientifically  and  economically  sound 
country  life." 

The  chairman  of  the  Country  Life  Commission  had  been  an 
exponent  of  agricultural  surveys  for  nearly  two  decades.  It 
was  but  fitting  that  he  should  be  the  person  to  sound  the  note 
for  country  hfe  surveys  and  expound  the  survey  idea  as  apphed 
to  the  social  side  of  farm  life.    In  191 1  he  set  forth  the  following 


THE  SOCIAL  SIDE  OF   FARM   LIFE  385 

general  ideas  on  the  scope  and  character  of  rural  survey  work : 
The  real  rural  survey, he  stated,should  be  a  slowly  and  studiously 
made  record,  rather  than  a  mere  exploration,  an  inspection,  a 
canvass,  or  a  campaign.  It  was  his  belief  that  any  lighter  efforts, 
however  necessary  for  temporary  uses,  belong  to  a  different  order 
of  inquiry.  Then,  too,  according  to  the  chairman,  the  survey 
should  be  strictly  scientific  in  spirit,  taking  account  of  every 
significant  fact,  wholly  apart  from  bias  in  the  mind  of  the  sur- 
veyor, the  goal  being  the  making  of  a  record  of  the  entire  situ- 
ation, and  the  telling  of  the  whole  truth,  in  order  to  accumulate 
a  substantial  body  of  fact,  so  that  every  community  might  build 
its  life  upon  the  fact  of  the  community.  It  was  the  plan  of  the 
chairman  that  these  surveys  should  be  made  by  many  agencies, 
such  as  colleges,  schools,  departments  of  agriculture,  and  experi- 
ment stations,  assisted  by  societies,  churches,  welfare  agencies, 
and  individuals,  all  working  under  a  plan  of  cooperation.^ 

Some  rural  surveys.  In  response  to  the  policy  of  study,  in- 
vestigation, and  survey  set  forth  by  the  Country  Life  Commis- 
sion, "an  agricultural  survey  "  in  igii  in  Tompkins  County, 
New  York,  although  devoted  mainly  to  labor-incomes,  took 
stock  of  certain  country  hfe  features,  and  pioneered  the  way 
in  survey  making.  Consideration,  for  example,  was  given 
women  farmers.  Their  labor  incomes  were  compared  with  the 
labor  incomes  of  men.  Their  help  problem  on  the  farm  was 
inspected.     Their  total  opportunity  was  assessed. 

To  take  another  instance,  the  farm  near  town  or  city,  as  a 
residence,  home,  and  side  occupation  for  people  in  town  or  city 
occupations  was  considered.  The  opportunity  for  a  lawyer, 
teacher,  mechanic,  and  the  like,  to  live  in  the  country,  operate 
a  farm,  and  still  carry  on  work  in  town  was  estimated  on  the  basis 
of  the  instances  encountered. 

The  value  of  good  country  roads  was  not  allowed  to  pass 
unnoticed.  The  empty  houses  in  the  country  were  explained, 
interpreted,  and  differentiated  from  abandoned  farms. 

An  interesting  correlation  was  made  between  the  education 
and  labor  incomes  of  farmers  in  Tompkins  County.  A  high  school 

'  L.  H.  Bailey,  "The  Survey  Idea  in  Country  Life  Work." 
2C 


386  AGRICULTURAL  ECONOMICS 

education  in  this  area  of  investigation  was  apparently  equal  to  a 
$6000  bond  bearing  5  per  cent  interest.  Younger  farmers,  how- 
ever, did  not  seem  to  be  more  highly  educated  than  their  elders.^ 

A  remarkable  series  of  "  Rural  Life  Surveys,"  made  from 
the  point  of  view  of  the  church,  in  Missouri,  Ohio,  Tennessee, 
Maryland,  Illinois,  Kentucky,  Indiana,  and  other  states,  began 
to  appear  in  191 1  and  continued  through  a  period  of  several 
years.  In  each  state  selected  several  counties  were  surveyed, 
generally  by  townships.  The  economic  conditions,  the  general 
character  of  the  population,  the  social  mind  (involving  communi- 
cation, community  manners,  meetings,  amusements,  families, 
cooperation,  organizations),  clubs,  education,  recreation,  morals, 
religious  conditions  and  activities,  social  welfare  (involving 
public  health,  distribution  of  wealth,  community  improve- 
ments), maps  and  charts,  are  all  included  in  the  wide  array 
of  topics  taken  up  by  these  studies.  Photographic  illustrations 
of  bad  and  good  conditions  appear  frequently  in  the  pamphlets. 
This  series  of  surveys  has  had  a  wide  influence,  especially  in 
focusing  attention  upon  bad  rural  conditions,  and  leading 
people  to  a  program  of  rural  progress.^ 

Some  significant  township  social  surveys  have  been  made  by 
various  universities  and  colleges.  These  cover  the  range  of 
social,  reHgious,  educational,  health,  and  economic  conditions 
in  a  general  way,  and  mark  the  beginnings  of  serious  effort  to 
correlate  the  facts  in  the  whole  field  of  country  life.^ 

A  few  educational  studies  covering  the  rural  school  situation 
in  a  state  have  been  pubHshed  by  departments  of  public  instruc- 
tion, state  universities,  and  colleges  of  agriculture.* 

1  C.  F.  Warren,  "An  Agricultural  Survey,"  Bulletin  295,  Cornell  University. 

2  The  Department  of  Church  and  Country  Life  of  the  Presbyterian  Board  of 
Home  Missions. 

2  Carl  W.  Thompson,  "  Social  and  Economic  Survey  of  a  Rural  Township  in 
Minnesota."  Lewis  H.  Haney  and  George  S.  Wehrwein,  "A  Social  and  Economic 
Survey  of  Southern  Travis  County,  Texas."  Paul  S.  Pierce,  "Social  Surveys  of 
Three  Rural  Townships  in  Iowa."  George  H.  Von  Tungeln,  "A  Rural  Social 
Survey  of  Orange  Township,  Iowa." 

«E.  V.  White  and  E.  E.  Davis,  "A  Study  of  Rural  Schools  in  Texas."  C.  C. 
Sargent,  "The  Rural  and  Village  Schools  of  Colorado."  W.  H.  Allen,  "Rural 
Schools  in  Wisconsin." 


THE  SOCIAL  SIDE  OF  FARM  LIFE  387 

Health  surveys  are  just  starting  with  expert  investigators 
behind  them.  The  units  of  measure  are  so  well  standardized 
that  rural  health  studies  may  be  looked  for  in  increasing 
numbers. 

Many  rural  community  surveys  have  been  attempted,  but 
very  few  have  been  published.  A  community  survey  of  tenancy 
here  and  there  has  shown  the  way  to  specialization  in  the  study 
of  farm  Hfe.^  Interesting  school  district  surveys  have  been 
taken  by  country  children  and  teachers.  Several  analyses  of 
counties  into  communities  by  a  process  of  survey  have  dis- 
played the  close  relation  of  farm  Hfe  and  village,  town,  and  city 
institutions.^  Beginnings  have  also  been  made  in  tracing  out 
county  government  budgets  to  locate  the  effectiveness  of 
official  service  in  the  county  form  of  government.^ 

A  cooperative  plan  of  national  research.  Country  life  has 
justified  itself  by  these  initial  studies  as  a  field  worthy  of  investi- 
gation. These  surveys,  although  made  in  limited  areas  of  the 
United  States,  and  carried  on  without  regard  to  concerted 
action,  have  proved  stimulating  and  have  awakened  the  hope 
that  a  national  plan  of  research  may  soon  be  set  in  motion. 
The  pressing  need  now  seems  to  be  for  a  determination  of  the 
most  significant  problems  which  are  susceptible  of  study  in  the 
life  of  our  farm  populations.  These  problems  should  be  stated 
in  standardized  form,  and  then  more  or  less  uniform  methods 
of  study  should  be  agreed  upon  for  general  use.* 

A  federal  bureau  of  country  Hfe  research  would  facilitate 
the  adoption  of  standard  problems,  methods,  and  a  concerted 
movement  nation-wide. 

The  United  States  census  of  population.  To  know  the  move- 
ment of  populations  is  a  desideratum  from  many  points  of  view. 
Heretofore  the  census  has  given  us  two  main  classes  of  popula- 
tion,  the  rural,   the  urban.     The  urban  population,   broadly 

•  Agricultural  Experiment  Station  of  University  of  Wisconsin,  Research  Bulletin 
44,  "Farm  Tenancy." 

2  C.  J.  Galpin,  "The  Social  Anatomy  of  an  .Agricultural  Community." 

5  E.  C.  Branson,  The  University  of  North  Carolina  Record,  September,  igiy. 

*  Rural  Sociology  Committee,  "Standardization  of  Research,"  American  Journal 
oj  Sociology,  November,  1918. 


388  AGRICULTURAL  ECONOMICS 

speaking,  has  included  all  persons  living  in  incorporated  places 
of  2500  people  or  more ;  the  rural  population  includes  all  persons 
living  outside  urban  territory.  The  movements  of  the  popula- 
tion engaged  in  agriculture  have  not  been  a  matter  of  plain 
scientific  disclosure  by  the  census,  but  rather  an  estimate  wrung 
from  the  classifications  "  rural  "  and  "  urban."  All  the  figures 
on  "  rural  decrease  "  of  population  and  on  the  gradual  but 
strong  migration  of  "  rural  "  people  toward  cities  fail  to  give 
the  exact  facts  about  people  living  on  the  land  as  land  workers. 
It  is  futile  to  build  up  permanent  theories  upon  the  movement 
of  farm  population  until  we  have  census  data  upon  farm  popu- 
lation as  clean-cut  as  we  possess  about  the  population  living  in 
cities  of  100,000  people. 

If  the  census  could  classify  our  population  under  three 
heads,  namely,  city  population  (setting  up  a  standard  of 
population  for  a  city),  village  population  (setting  up  a  standard 
of  population  for  a  village),  farm  population  (population  living 
on  farms),  we  would  have  the  basis  for  a  scientific  calculation  of 
population  movements,  and  we  should  begin  to  know  exactly 
about  "  decreases  "  and  "  increases  "  and  direction  of  ''  migra- 
tions "  of  our  land  dwellers.  It  would  be  a  source  of  valuable 
knowledge  on  farm  problems,  moreover,  to  be  able  to  dis- 
criminate village  population  from  farm  population.  The 
relationships  between  village  and  farm  require  this  discrimina- 
tion, rather  than  the  merging  which  we  have  at  present. 

Village  problems  on  the  human  side  are  quite  distinct  from 
farm  problems.  In  fact,  village  psychology,  village  institutions, 
village  government,  village  abnormality,  and  the  like,  justify 
separate  research  methods  and  separate  treatment. 

The  census  should  become  the  great  basal  source  of  research 
in  country  life  problems.  And  it  will  take  its  place  and  function 
in  this  respect  just  as  soon  as  the  foregoing  threefold  classifica- 
tion of  population  is  standardized.  Then  a  series  of  tabulations 
on  Hteracy,  iUiteracy,  age  groups,  color,  nationality,  sex,  marital 
conditions,  in  respect  to  each  of  the  three  classifications,  would 
give  the  initial  materials  for  further  research.^ 

1  C.  J.  Galpin,  "Rural  Life,"  p.  359. 


THE  SOCIAL  SIDE  OF   FARM  LIFE  389 

Reorganization.  The  country  life  movement  is  now  at  the 
stage  of  reorganization.  Old  institutions  are  being  subjected 
to  close  inspection  with  a  view  to  adapting  them  more  perfectly 
to  present  conditions.  New  institutions  are  being  proposed 
to  give  a  better  channel  of  life  to  the  farming  group.  Methods 
of  rural  organization  everywhere  occupy  the  center  of  attention. 
Some  urban  institutions,  likewise,  are  in  process  of  adjustment 
to  newly  recognized  rural  relations.  Economic  problems  of  the 
farm  in  some  cases  wait  upon  the  reorganization  of  the  institu- 
tional life  of  farm  and  town.  A  survey  of  the  problems  of 
organization  will  disclose  to  a  close  observer  the  profound 
character  of  the  attempt  thoroughly  to  organize  the  human  side 
of  farm  life. 

The  farm  household.  Family  life  in  the  farm  household  at 
once  engages  the  thought  of  those  who  would  modernize  living 
conditions  in  the  country.  A  general  opinion  obtains  that  the 
American  farm  family  is  restless,  no  sooner  getting  settled 
upon  a  piece  of  land  in  a  community  than  it  opens  the  doors  to 
floating  suggestions  of  a  better  farm,  a  more  favorable  com- 
munity, a  more'  congenial  climate,  elsewhere.  Not  that  out- 
and-out  endeavors  to  shift  from  farm  to  farm  are  started ;  but 
that  the  American  farm  family  always  views  shifting  as  within 
easy  range  of  the  possible.  So  owners  of  farms  in  America  are 
not  viewed  as  rooted  and  grounded  in  any  particular  community 
to  be  transplanted  with  the  same  difficulty  as  a  massive  oak. 
Farm  tenants,  moreover,  are  proverbially  mobile,  shifting,  cut- 
ting and  trying  from  farm  to  farm,  and  from  community  to 
community. 

To  this  instabiHty  of  the  American  farm  household  has  been 
ascribed  the  undeveloped  character  of  rural  institutions.  If 
all  farm  famihes,  even  the  leading  ones,  are  shifting,  then  per- 
manence, long-time  policy,  lavish  attention,  are  impossible  in 
behalf  of  the  institutions  and  organizations  surrounding  the 
household.  How  to  stabilize  the  farm  home,  therefore,  without 
rendering  it  immobile,  is  a  problem  of  the  first  class,  possibly 
incapable  of  solution  until  tenancy  shall  have  received  prolonged 
cooperative  study  and  shall  have  been  taken  up  more  elaborately 


390  AGRICULTURAL  ECONOMICS 

into  public  policy.  A  hope  exists  that  tenant  shifting  may 
be  much  decreased  by  a  simple  knowledge  of  the  social  forces  at 
work,  and  an  application  of  methods  of  social  control. 

There  is  a  suspicion,  moreover,  that  instability  in  rural  family 
life  may  be  related  somewhat  to  the  ideal  of  "  getting  on  " 
materially,  or  as  the  farmer  views  it,  "  getting  out  of  debt." 
The  mortgage  on  the  farm  is  the  strong  bond  of  household 
partnership.  Every  one  works  to  burn  the  mortgage ;  every- 
one, moreover,  overworks ;  and  even  if  an  actual  obsession  does 
not  completely  control  the  whole  family,  too  often  so  large  a 
preponderance  of  attention  is  given  to  production,  profits, 
savings  for  the  mortgage,  that  the  home  spirit  is  driven  from  the 
fireside.  Deep  sentimental  attachments  to  the  house  as  a  human 
habitation,  to  the  farmstead  as  a  spot  sacred  to  the  anniver- 
saries and  traditions  of  the  family,  frequently  do  not  develop. 

When  the  mortgage  is  burned,  the  work  bond  is  broken,  the 
compelUng  motive  is  withdrawn,  and  the  family  is  susceptible 
to  new  ideas  of  speculation  or  of  a  premature  retirement  from 
an  overcrowded  economic  life.  If  it  has  not  been  completely 
smothered  in  the  days  of  debt  paying,  the  home  spirit  may 
arise  from  the  ashes  of  the  mortgage,  and  new  life  may  come  to 
all  the  inmates  of  the  home,  and  life  as  a  goal  may  be  counted 
more  valuable  than  the  material  basis  of  producing.  The  new 
spirit  will  gently  lead  the  human  beings  where  the  old  ideal 
whipped  the  toilers  to  the  field.  When  the  mortgage  bogie 
is  once  driven  from  the  American  farm  household,  a  calmer  spirit 
of  stability,  a  firmer  attachment  to  the  spot  where  hfe  is  lived, 
will  ensue. 

The  mortgage  bank  with  long-term  loans,  fair  interest  rule, 
and  very  gradual  payment  of  the  principal,  will  do  much  to 
drive  away  the  "  get  out  of  debt  quick  "  specter  from  the  soul 
of  the  farm  home.  Life,  human  life,  then  will  more  and  more 
become  the  motive  of  country  living. 

The  problem  of  the  farm  household  will  not  be  solved  until 
there  appears  among  its  members  an  appreciation  of  the  finer 
things  of  life.  This  needed  appreciation  will  come  increasingly 
as  the  farm  housewife  is  freed  from  drudging  toil,  as  the  farm 


THE   SOCIAL  SIDE  OF  FARM  LIFE  391 

child  is  allowed  to  get  in  touch  with  a  larger  cross  section  of  life, 
and  as  the  farm  father  grows  to  feel  on  easy  terms  with  the 
business  men  of  his  community. 

One  strong  influence  leading  to  hope  and  appreciation  in  the 
home  will  be  a  policy  of  screening  off  from  the  house  and  home 
view,  with  objects  of  beauty,  the  more  vulgar  aspects  of  farm 
work,  necessary  as  they  may  be.  Walls,  trees,  hedges,  vines, 
have  always  been  used  as  screens,  more  or  less,  about  the  house. 
A  pubUc  policy  to  this  effect  would  make  the  practice  more  gen- 
eral. Ail  pictorial  representations  of  farm  life  in  advertisements, 
in  books,  in  magazine  articles,  in  wall  decorations,  would  do  a 
service  to  the  life  side  of  the  farm  household  if  they  were  to  put 
forward  the  best,  the  ideal  indeed,  rather  than  the  common 
realistic  instance  in  posture,  garment,  gait,  and  use  of  hand 
implements. 

There  is  one  reservation  to  be  made  in  regard  to  the  reorganiza- 
tion and  socialization  of  the  farm  household.  America  will 
demand  that  no  scheme  of  organization  of  the  farm  home  shall 
endanger  the  stamina  of  the  farm  family  as  a  basal  unit  of  the 
nation.  No  social  progress  would  be  worth  while  at  the  price 
of  a  weakening  of  the  family  tie  on  the  farmstead.  The  final 
statement,  therefore,  of  the  farm  household  problem  is  how  to 
give  the  farm  family  the  higher  goods  of  life  in  much  larger  meas- 
ure, and  how  at  the  same  time  without  fail  to  maintain  the 
present  bond  of  viriUty  in  the  family  unit. 

The  neighborhood.  Family  life  in  the  country  is  environed 
with  neighbors.  As  in  biblical  history,  the  drama  of  life  on  the 
farm  is  played  by  father,  mother,  sons,  daughters,  servants, 
and  neighbors.  The  neighborhood  is  a  unit  of  loose  organiza- 
tion. However,  its  bond  of  cohesion,  racial,  topographical,  or 
institutional,  is  usually  very  real  and  admits  of  tightening. 
"  Good  neighbors,"  "  accommodating  neighbors,"  "  neighbors 
you  can  depend  on,"  are  phrases  which  indicate  the  tie  of 
organization.  "  Gossipy  neighbors,"  "  slippery  neighbors," 
"  rough  neighbors,"  indicate  a  deficiency  in  organization. 

The  fact  is  that  scientific  farming  needs  neighborhood  spirit, 
enterprises,   and  mechanism  of   organization.     Technical   co- 


392  AGRICULTURAL  ECONOMICS 

operation  depends  upon  neighborliness,  and  good  neighbors. 
Common  policies  with  respect  to  the  territory  of  the  neighbor- 
hood, the  institutions  of  the  neighborhood,  the  roads  of  the 
neighborhood,  imply  a  degree  of  intensive  organization. 

The  problem  of  organization  of  this  territorial  unit  which 
stands  above  the  farm  household  involves,  first  of  all,  a  some- 
what ofl&cial  or  at  least  standardized  recognition  of  neighbor- 
hoods in  the  county.  In  fact,  investigation  is  very  much  needed 
at  this  point  in  order  to  locate  these  population  groups  which 
are  not  bounded  by  statute  lines.  A  map  of  a  county  containing 
all  the  neighborhood  groups  discoverable  would  go  far  toward 
clearing  up  and  making  standard  this  unit.  It  is  quite  probable 
that  the  neighborhood  population  group,  which  has  the  flavor 
of  spontaneous  choice  about  it,  is  one  of  the  most  important 
groups  for  organization  and  social  utihzation  in  farm  Ufe. 
How  shall  this  unit  be  integrated  into  modern  rural  county 
organization?  Is  it  most  naturally  a  school  group?  A  co- 
operative group?  A  farmers'  club  group?  A  neighborhood 
house  group  ? 

It  is  perhaps  idle  to  let  the  fancy  go  upon  this  problem  without 
considerable  study  of  the  social  texture,  psychology,  and  eco- 
nomics of  the  neighborhood.  Very  httle  as  yet  has  appeared, 
either  in  literary  or  survey  form,  upon  this  feature  of  farm  life. 
Some  few  settlements,  school  districts,  villages,  some  few  moun- 
tain clans,  have  been  described ;  enough  in  fact  to  substantiate 
the  claim  that  every  county  is  packed  with  socio-economic 
population  groups  of  this  character.  It  is  greatly  to  be  desired 
that  some  responsible  investigating  agency  should  give  us  a 
study  of  some  county  and  make  such  an  analysis  as  will  etch  the 
neighborhood  group  into  our  geographic  sense.  Not  till  this 
study  has  been  made  can  the  problem  of  organization  even  be 
stated. 

The  business  community.  As  the  farmer  becomes  increas- 
ingly a  business  man,  it  is  of  growing  importance  that  he  should 
be  a  recognized  member  of  some  one  business  community. 
Business  is  interlocking.  The  mercantile  business,  the  manu- 
facturing business,  the  farming  business,  are  fit  subjects  for 


THE  SOCIAL  SIDE  OF  FARM  LIFE  393 

closer  mutual  organization,  but  from  the  point  of  view  of 
country  life,  the  first  essential  is  that  the  farm  shall  be  unmis- 
takably linked  with  a  particular  local  community  of  business 
enterprises.  The  farmer  needs  the  esprit  de  corps  of  business 
associates,  not  only  in  farming,  but  in  the  other  Unes  of 
business  throughout  his  local  community. 

From  being  a  soHtary  seller  of  farm  produce  and  buyer  of 
the  raw  materials  which  enter  into  his  farm  products,  to  being 
associated  with  the  farmers  of  his  neighborhood  in  selling  and 
buying,  is  a  considerable  step ;  but  this  sort  of  business  associa- 
tion falls  short  of  ranging  oneself  with  the  business  men  in 
general  of  a  considerable  village  or  small  city  trading  center. 
The  farmer's  kind  of  business  is  worthy  of  being  represented  in 
the  local  business  group.  The  modern  farmer  is  personally 
worthy  of  this  association.  Moreover,  the  community  of 
business  in  town  and  on  farm  has  a  unity  of  purpose,  territory, 
institutions,  ideals,  which  logically  demand  that  every  farmer 
of  hope  recognize  himself  as  a  member  of  the  business  group  and 
assume  all  the  responsibihties  of  his  common  business  citizen- 
ship. 

The  time  has  passed  when  a  modem  farmer  can  evade  his  local 
responsibihties  as  a  business  man  with  the  plea  that  he  can  go  to 
several  trading  centers  at  will,  for  he  can  and  should  choose  his 
main  business  center  and  business  associates.  The  time,  also, 
has  gone  when  the  mercantile  and  professional  business 
men  of  a  village  or  city  can  ignore  the  outlying  farmer  as  a 
community  partner  in  business  enterprises  on  the  ground  that 
he  is  not  a  voter  in  the  village  or  city.  The  right  attitude  of 
farmers  and  townismen  is  based  upon  the  fundamental  fact 
that  most  villages  and  small  cities  in  America  have  fixed  agricul- 
tural land  bases,  and  that  farm  and  town  belong  to  each  other. 

The  problem  of  reorganization  of  the  business  life  of  the  farm 
involves  on  the  social  side  the  distribution  of  American  popula- 
tion into  rather  definite  population  groups  of  town  and  terri- 
torially associated  farms.  The  sooner  a  farmer  knows  his 
business  groups  and  stands  lo}'al  to  his  group,  the  sooner  a 
community  spirit  will  arise  which  will  react  upon  the  farmer's 


394  AGRICULTURAL  ECONOMICS 

habits  of  life  and  thought.  A  great  service  remains  to  be  done 
through  some  sort  of  oflficial  mapping  of  these  community  groups. 
Whether  a  closer  legal  relation,  such  as  some  form  of  municipal 
government,  will  ever  obtain  between  the  territory  of  farm  and 
adjacent  town,  it  is  premature  to  surmise.  The  feud  between 
farmer  and  townsman,  although  of  long  standing,  in  fact  dating 
back  as  far  as  the  independent  stride  of  the  one,  and  the  suave 
speech  of  the  other,  is  not  without  its  history  of  truce  and  honest 
endeavor  to  come  to  terms  of  community  understanding. 
The  endeavors  of  many  commercial  clubs,  boards  of  commerce, 
business  men's  associations,  town  and  country  clubs,  to  bridge 
the  gap  between  town  business  and  farming  furnish  grounds  for 
the  beHef  that  some  general  and  final  agreement  will  prove 
mutually  satisfactory. 

Educational  institutions.  If  real  hope  is  to  enter  country  life, 
considerable  reorganization  of  the  rural  channels  of  education 
will  be  necessary.  Some  expansion  in  their  ideals  of  education 
will  need  to  come  to  farmers.  There  will  be  required  also  on 
the  part  of  townsmen  some  recognition  that  education,  high 
as  well  as  low,  is  a  legitimate  privilege  of  the  country  dweller. 
Some  further  adaptation  of  educational  curricula  to  the  voca- 
tion of  farming  will  have  to  be  made.  In  fact,  if  the  farmer's 
family  is  to  be  a  candidate  for  a  hfe  of  culture,  refinement,  and 
skill,  the  doors  to  right  training  must  be  opened  wide,  and  this 
means  schools,  large  schools,  high  schools,  vocational  schools. 

The  problem  of  schools,  —  that  is,  the  problem  of  leading 
children  into  the  world's  experience  before  the  child  has  had 
his  own  experience,  —  is  wrapped  up  in  the  whole  problem  of  the 
social  side  of  farm  Hfe.  Not  until  the  farmer  has  some  abate- 
ment of  his  timidities  and  senses  his  ability  to  use  large  units, 
will  he  rise  to  the  ideals  of  education  for  his  children.  Not  until 
he  gets  over  the  feverish  obsession  for  clearing  the  debt  ojff 
the  farm,  and  substitutes  life  as  a  goal,  will  the  farmer  come  into 
the  full  fruition  of  this  educational  hope.  When  the  household 
regime  is  enriched  by  a  neighborhood  regime,  and  this  is  sup- 
plemented by  community  organization,  education  will  pre- 
sumably receive  a  large  impetus. 


THE  SOCIAL  SIDE  OF  FARM  LIFE  395 

The  deficiencies  of  the  country  school  have  been  generally 
perceived,  and  the  remedies  are  fast  being  applied.  One 
question,  however,  still  remains  unanswered:  whether  the 
larger  country  school  of  the  consolidated  graded  type  shall  be 
organized  with  Kttle  regard  to  the  larger  community  of  business, 
or  whether  it  shall  be  an  integral  part  of  a  community  system, 
leading  up  to  a  community  high  school  offering  vocational 
courses.  Perhaps  this  undetermined  question  is  fundamentally 
a  problem  of  democracy,  and  may  be  stated  thus :  shall  the  farm 
child  grow  up  in  an  educational  democracy,  or  shall  he  be 
trained  in  a  group  of  farm  children,  somewhat  aloof  from  the 
children  of  tradespeople,  artisans,  professional  people? 

It  may  be  that  the  country  school  which  shall  be  organized 
with  respect  to  natural  population  grouping  will  be  found  to  be  a 
school  of  large  neighborhood,  and  contain  only,  or  quite  largely, 
farm  children ;  but  it  may  also  be  found  that  it  is  wholly  within 
one  business  community,  and  is  correlated  with  a  local  commu- 
nity high  school. 

The  problem  of  educational  organization  will  have  one  im- 
portant question  to  determine,  namely,  whether  the  farmers' 
high  school  shall  be  apart  in  the  open  country,  or  whether  it  shall 
be  democratic  and  be  located  in  a  town  center.  Both  farmers 
and  townsmen  are  parties  to  this  problem.  The  nation  demands 
workable  democracies;  but  it  also  demands  that  each  class  of 
workers  shall  be  so  protected  that  neither  they  nor  their  work 
shall  suffer.  If  a  democratic  high  school  can  be  operated  so 
as  to  be  fair  at  every  point  to  farming  as  an  occupation,  and  to 
farm  people  as  a  class,  then  a  high  school  in  town  will  be  no 
more  objectionable  than  a  bank  in  town.  But  if  such  a  high 
school  shall  act  practically  as  a  sponge  to  take  up  the  children 
from  the  land  and  squeeze  them  into  the  city  for  life,  then  a 
high  school  in  the  country  will  be  the  chosen  alternative. 

Business  institutions.  How  far  can  the  farm  get  on  without 
the  traditional  mechanisms  of  economic  exchange?  Is  the 
retail  town  a  necessity  for  farming?  Or  could  farmers  better 
do  with  the  mechanisms  of  a  metropoUtan  trade  center,  mail 
agencies,  parcels  post,  express,  freight?    These  are  questions 


396  AGRICULTURAL  ECONOMICS 

which  arise  for  academic  debate,  and  many  farmers  act  in  their 
trade  as  if  they  had  come  to  a  decision  in  the  matter.  Are  new 
mechanisms  of  trade  required  to  displace  the  retail  store  of  the 
town?  Should  farmers  band  together  in  buying  and  selhng? 
How  completely  should  this  policy,  already  tried  a  little,  be 
applied?  Should  there  be  farmers'  mechanisms  for  selhng, 
but  not  for  buying?  For  selling  all  their  products,  but  for 
buying  only  such  raw  materials  as  enter  into  their  agricultural 
product  ?  Could  the  community  trading  town  compromise  with 
farmers  in  trade  matters  to  this  extent,  that  it  would  agree  that 
farmers  should  operate  in  town  selling  exchanges,  shipping 
agencies,  produce  exchanges,  etc.  on  the  condition  that  the 
farmers'  buying  agencies  would  deal  only  in  articles  which  enter 
into  the  agricultural  product,  such  as  hme,  fertiHzer,  seeds, 
feed,  farm  implements,  etc.  ?  Under  the  latter  plan,  the  town 
retailers  would  furnish  at  retail  all  domestic  goods,  clothing, 
household  furniture,  groceries,  meats,  jewelry,  etc.  Would  this 
be  an  equitable  bargain  between  town  and  farm? 

These  are  some  of  the  questions  of  organization  of  community 
farm  business.  Experimentation  is  going  on  continually  with 
all  kinds  of  trade  arrangements  and  trade  mechanisms.  It 
should  be  remembered,  however,  that  the  social  side  of  farm 
life  depends  upon  community  spirit,  good  will,  democracy, 
institutions,  loyalty.  The  winning  of  the  struggle  to  achieve 
economic  freedom  and  national  cooperation  among  farmers 
should  not  be  construed  by  the  farmer  as  a  release  from  the  civic 
and  social  duties  of  community  life.  The  problem  of  business 
institutions  and  mechanisms,  therefore,  resolves  itself  into  the 
devising  of  ways  and  means  for  building  up  community  life 
through  a  system  of  integrated  social  channels  and  mechanisms 
of  business. 

From  this  viewpoint,  the  farm  bureau  shows  promise  of 
developing  the  educational,  agricultural,  and  business  interests 
of  farmers,  and  preserving  lines  of  community  loyalty  in  a 
county.  When  the  farm  bureau  shall  be  completely  incor- 
porated into  county  government,  so  that  the  electorate  of  a 
county  has  control  of  the  policy  of  the  bureau  as  fully  as  it  has 


THE  SOCIAL  SIDE  OF  FARM  LIFE  397 

control  of  education  in  the  county  school  system,  then  perma- 
nence of  organization  will  give  chance  for  a  democratic  develop- 
ment of  the  principles  and  methods  of  farming. 

Even  though  it  is  difficult  for  the  farmer  to  have  a  primary 
interest  in  the  educational  side  of  farm  bureau  work,  only  a 
sHght  shift  of  emphasis  need  be  made  among  the  objectives  of 
the  farm  bureau  to  put  the  educational  and  social  features  into 
a  position  of  favor.  For  example,  the  farmer  will  always  have 
to  sell  his  product.  His  interest  in  marketing,  therefore,  is  per- 
manent and  continuous.  Suppose  the  farm  bureau  commission 
of  the  county,  elected  or  appointed,  make  selling  of  the  county 
farm  products  a  primary  objective;  creating  the  necessary 
voluntary  shipping  associations ;  relating  the  products  of  every 
community  to  these  associations;  then  every  farmer  in  the 
county  would  become  interested  in  the  farm  bureau.  It  would 
be  an  easy  step,  then,  from  selling  to  the  formulas  of  agricultural 
production.  Standardization  of  quahty  and  the  methods  of 
high  yields  would  then  be  logically  related  to  the  farmer's 
prime  interest.  Social  projects,  clubs,  roads,  fairs,  fetes,  would 
follow  these  other  interests.  It  remains  for  some  organizing 
genius  to  work  out  first  the  business  mechanism  of  the  farm 
bureau  idea  so  as  to  relate  it  to  the  electorate  of  a  county; 
secondly,  to  make  marketing  a  primary  object;  and  thirdly, 
to  correlate  government  extension  service,  both  educational 
and  social,  with  each  community. 

Social  institutions.  The  bright  things  of  hfe  which  produce 
the  happier  moods,  the  pleasant  emotions  of  contrast,  variety, 
and  the  like,  have  often  been  mentioned  as  lacking  in  country 
living.  The  tail  of  work  is  always  attached  to  the  farm  kite  of 
play.  Writers  have  become  accustomed  to  load  the  odium  of 
many  other  defects  upon  this  outstanding  trait  in  rural  char- 
acter. "  Bring  about  recreation,  amusement,  the  wide  and 
frequent  contact  of  personaHties  in  country  Hfe,  and,"  it  is 
said,  "  farm  Hfe  will  be  rehabiHtated." 

We  have  by  this  time  found  out  that  country  Hfe,  and  labor, 
are  by  no  means  without  their  own  manner  of  complexities; 
and  that  these  complexities  are  by  no  means  set  in  sequence 


398  AGRICULTURAL  ECONOMICS 

like  ten-pins.  The  problem  is  not  to  knock  down  one  pin  and 
see  the  others  tumble.  Rather,  country  hfe  is  a  fabric,  all 
elements  interwoven,  the  whole  hanging  together.  It  is  a  long, 
arduous  task  to  remake  the  fabric.  It  is  no  easy  matter  to 
bring  social  pleasures  within  the  pale  of  country  living,  and  cause 
the  whole  of  life  thereby  to  be  quickened.  But  the  problem 
of  social  institutions,  however  difficult,  must  be  faced,  sooner 
or  later,  in  order  that  the  more  genial  side  of  life  may  have  its 
rightful  chance  in  country  living. 

Larger  schools,  providing  age-groups  of  children  who  possess 
similar  experiences,  ambitions,  and  joys  will  start  institutions 
for  recreation.  Farmers'  clubs,  junior  clubs,  young  folks' 
clubs,  are  good  agencies  to  give  the  initial  impulse  toward 
permanent  forms  of  recreation.  Home-made  entertainment 
will  always  prevail  in  the  country,  and  a  modicum  of  organiza- 
tion of  the  younger  persons  will  result  in  social  enterprises. 

The  present  wide-spread  impulse  to  build  neighborhood  and 
community  houses  will,  it  is  hoped,  materially  accelerate  the 
coming  of  the  lighter  and  brighter  things  of  country  life.  It  is 
to  be  hoped  that  in  our  larger  towns  the  Y.  M.  C.  A.  and 
Y.  W.  C.  A.  buildings,  especially  their  gymnasiums,  may  be 
open  for  the  use  of  near-by  country  youth,  and  that  the  plan 
of  interchange  of  hospitality  between  groups  of  young  people 
in  town  and  country  may  be  widely  adopted.  High  school 
pupils  and  teachers  in  a  town  high  school  have  the  opportunity 
of  setting  the  fashion  in  the  larger  community  of  exchanging 
hospitalities  with  country  schools.  Municipal  club-houses 
and  theaters  have  already  been  successfully  managed  for  town 
and  farm  people.  Community  fairs,  too,  have  taken  high  rank 
as  rural  social  institutions. 

The  real  problem  of  rural  social  institutions,  after  all,  is  to 
discover  natural  population  groups,  and  then  find  out  how  to 
create  the  mechanism  for  democratic  recreation  within  a  whole 
group. 

Religious  institutions.  The  modern  view  of  rural  progress 
had  some  of  its  first  apostles  among  those  interested  in  the 
country  church.    The  threatened  decadence  of  church  life, 


THE  SOCIAL  SIDE  OF  FARM   LIFE  399 

if  not  of  religion,  in  the  open  country,  startled  church  leaders. 
So  earnest  has  been  the  endeavor  to  meet  the  rural  church 
problem  that  the  several  national  religious  bodies  have  created 
a  department  of  church  and  country  life,  with  a  secretary  or 
superintendent.  A  staff  of  rural  church  thinkers  has  been 
formed.  Very  positive  plans  to  study  the  country  church, 
to  reparish  the  farm  population,  to  provide  noble  church  edifices 
and  comfortable  parsonages,  to  organize  church  congregations 
for  social  service  as  well  as  for  social  religion  have  been  set 
forth.  The  auxiliary  societies  of  the  Y.  M.  C.  A.  and  Y.  W.  C.  A. 
have  undertaken  the  work  of  training  for  rural  leadership  in 
county  after  county.  The  Federal  Council  of  the  Churches  of 
Christ  in  America  has  its  commission  of  the  church  and  country 
life,  which  is  entering  upon  a  vast  plan  in  connection  with  the 
Interchurch  World  Movement  to  survey  the  rural  churches  of 
America. 

No  other  type  of  farm  institution  has  displayed  so  patently 
as  the  church  the  maladjustments  of  human  life  on  the  farm 
under  the  stress  of  a  national  tide  flowing  cityward.  It  is  not 
strange,  therefore,  that  the  first  questions  were  about  the  decay 
of  the  rural  church.  Not  strange  that  all  sorts  of  proposals 
and  remedies  have  been  made  to  improve  the  condition  of 
country  churches. 

An  important  problem  of  the  church  for  farmers  is  un- 
doubtedly connected  with  the  question  of  permanent  agricul- 
tural population  groups.  A  church  in  order  to  function  must  be 
in  a  natural  population  group.  But  a  far  deeper  problem 
than  this  presents  itself.  Churches  in  modern  times  must 
reach  a  certain  minimum  strength  in  order  to  succeed  at  all. 
This  minimum  strength  is  at  present  frequently  never  reached 
by  individual  churches.  How  to  guarantee  the  irreducible 
minimum  strength  to  each  country  church  amounts  to  an 
enigma.  In  solving  this  problem,  moreover,  some  arrangement 
must  be  arrived  at  among  the  national  religious  bodies  by  which 
a  process  of  give  and  take,  carried  out  with  scientific  inter- 
change, shall  enable  these  country  churches  to  come  up  to 
standard  membership.    There  are  many  indications  that  the 


400  AGRICULTURAL  ECONOMICS 

national  leaders  of  diJfferent  denominations  are  not  only  alive 
to  the  case  as  a  problem  of  academic  importance,  but  that  they 
are  determined,  both  from  motives  of  national  patriotism  and 
from  motives  of  a  deeper  spirit  of  Christian  concession,  coopera- 
tion, and  unity,  to  work  out  a  solution. 

Health  institutions.  An  inspection  of  the  hospital  records 
in  small  cities  will  in  certain  sections  of  the  United  States  dis- 
close a  surprisingly  large  use  of  hospital  facilities  by  near-by 
farm  families,  especially  in  surgical  cases.  The  hospital, 
general  and  maternity,  should  doubtless  be  extended  into  rural 
territory  for  common  use. 

The  country  nurse  is  proving  a  welcome  visitor  in  rural 
schools  and  communities,  and  bids  fair  to  become  the  founder 
of  an  institution.  If  the  Red  Cross  Association  could  be 
persuaded  to  take  over  permanently  as  its  "  after  the  war  " 
field  of  acti\'ity,  the  rural  sections  of  the  United  States,  and 
become  an  agency  for  rural  health  and  home  service,  the  rural 
health  problem  would  practically  be  on  the  road  to  solution. 

Governmental  institutions.  One  of  the  largest  rural  social 
problems  pertains  to  the  local  government  of  farm  population. 
The  forms  of  government  now  prevailing  in  townships,  counties, 
magisterial  districts,  and  parishes,  should  be  inspected  and 
refitted  to  modern  conditions.  Reorganization  is  needed. 
Very  few  attempts  have  been  made  to  take  the  primitive  tools 
of  rural  government  and  replace  them  with  machines  for  social 
purposes.  A  commission  in  every  state  appointed  to  study 
local  government  and  present  amendments  would  help  solve  the 
problem  of  rural  governmental  institutions. 

Here  is  where  the  farmer  should  be  presented  with  his  chance 
to  have  a  democracy  if  he  so  desires.  New  England  already 
knows  the  values  of  a  township  democracy  of  farm  and  village 
or  farm  and  city.  Perhaps  other  sections  of  the  United  States 
are  ready  to  amalgamate  farmer  and  townsmen  in  some  form 
of  local  municipaUty.  If  the  farmer,  however,  shall  prefer  a 
municipaUty  made  up  of  farmers  alone,  even  then,  contrary 
to  general  belief,  considerable  reorganization  will  be  necessary 
in  order  to  give  him  the  right  population  group  of  farmers  for 


THE  SOCIAL  SroE  OF  FARM  LIFE  401 

strong  local  government.  The  present  territorial  units  of  rural 
government,  so  far  at  least  as  they  concern  farmers,  are,  on  the 
whole,  deficient  in  social  cohesion.  So  reorganization  will  be 
necessary  under  whichever  theory  prevails,  —  democracy  of 
farm  and  town,  or  detached  farmer  municipahty. 

The  farmer  is  ready  for  a  set  of  governmental  powers  which 
shall  enable  him  to  accomplish  in  his  own  group  what  cities 
are  enabled  to  accompHsh  by  charters  for  their  population 
groups.  There  should  not  be  a  period  of  long  waiting  until 
the  farmer  demands  tliis  reorganization  himself.  The  nation 
needs  this  rural  reorganization.  This  is  demand  sufficient  for 
thinkers  and  statesmen. 

Theory  oj  organization.  Social  organization  will  proceed 
as  has  been  indicated  upon  one  of  two  theories,  or  upon  a  com- 
promise between  the  two.  These  two  opposing  theories  should 
be  plainly  known  and  reacted  to. 

The  first,  and  it  is  the  traditional  theory,  is  that  farm  hfe, 
so  far  as  possible,  should  for  whatever  purpose  be  organized 
by  itself,  aloof  from  the  people  of  other  industries,  professions, 
or  trades,  who  for  the  most  part  live  in  cities  and  villages. 

The  second  theory,  and  this  is  of  recent  origin,  is  that  farm 
life  is  only  a  part  of  national  life,  and  more  like  than  xmlike  all 
the  other  parts,  and  should  for  democracy's  sake  be  organized 
along  with  these  other  parts  within  a  natural  community  popu- 
lation group.  Just  as  the  nation  is  a  thorough-going  democracy 
of  all  kinds  of  occupations,  represented  in  Congress  and  public 
offices;  just  as  the  state  is  a  pure  democracy  of  farmer,  in- 
dustriahst,  and  professional,  so  the  local  community  should 
be  a  pure  democracy.  How  a  compromise  may  be  effected, 
combining  the  principles  of  detached  farm  hfe  and  a  pure 
democracy,  some  communities  can  already  show. 

Rural  legislation.  The  signs  of  hope  for  country  life  are 
seen  to  advantage  in  recent  attempts  to  put  into  statutes 
freedom  of  action  and  power  for  farmers  to  employ  the  taxing 
device  and  other  modern  social  instruments.  County  agri- 
cultural schools  figure  among  the  early  endeavors  to  give  priv- 
ilege to  rural  folks.     The  county  nurse  is  hkely  to  become  man- 


402  AGRICULTURAL  ECONOMICS 

datory  upon  counties.  The  introduction  of  mounted  state 
police,  as  militia  for  the  protection  of  open  country  populations, 
having  given  demonstration  of  usefulness  in  a  few  states  is  being 
encouraged  in  legislatures  of  other  states.  Electrification  of 
township  units  seems  Ukely  to  raise  up  a  rural  utility  under 
municipal  control.  Village  and  city  rest  rooms  for  country 
people  coming  in  to  trade  have  become  compulsory  in  one  state. 
This  plan  has  its  angles  of  interest  and  suggestiveness ;  the 
village  or  city  must  appropriate  a  certain  amount  of  money 
for  rest-room  maintenance,  whereupon  the  state  adds  a  like 
amount. 

Road  legislation,  frequent  and  even  startUng,  is  recognizing 
more  and  more  rural  population  groups.  The  trunk  line  idea, 
however,  good  and  fundamental  as  it  is,  needs  to  be  Unked  up 
with  the  community  roads  plan,  whereby  the  retail  trade  popu- 
lation of  villages,  towns,  and  small  cities  are  integrated  and 
their  institutional  purposes  are  faciHtated.  It  is  not  too  late 
in  the  newer  sections  of  the  United  States  for  legislation  to 
encourage  the  establishment  of  "  residence  roads,"  that  is,  the 
selection  of  certain  favorably  situated  roads  pertaining  to  a  par- 
ticular trading  center,  upon  which  most  of  the  farm  residences 
of  settlers  shall  be  located.  Residence  roads  would  save  much 
mileage  of  highly  surfaced  roadway,  bring  farming  people  into 
closer  neighborhood  contact,  and  facilitate  school  transporta- 
tion, and  other  institutional  development. 

Redistribution  of  rural  routes.  The  farmer  appreciates  his 
postal  service ;  in  fact  he  appreciates  this  daily  dehvery  of  mail 
so  much  that  he  is  slow  to  complain  of  any  flaws  in  the  present 
system.  One  defect,  however,  sooner  or  later  he  will  point  out. 
Just  because  he  is  becoming  a  business  man  along  with  a  partic- 
ular group  of  business  men  located  in  and  around  a  particular 
business  center,  he  is  going  finally  to  object  to  having  for  his 
maihng  address,  a  little  town  or  hamlet  to  which  perhaps  he 
seldom  or  never  goes.  A  closer  application  of  the  principle  of 
integrating  the  farmer  with  his  own  natural  population  group 
will  be  requested  of  the  government  in  distributing  the  rural 
routes. 


THE  SOCIAL  SIDE  OF  FARM  LIFE  403 

One  of  the  latest  movements  in  country  life  legislation  per- 
tains to  the  creation  of  new  types  of  territorial  districts.  The 
legaHzing  of  consolidated  school  districts,  in  shapes  fitted  to 
topographical  conditions;  and  the  forming  of  high  school 
districts  which  unite  village  or  city  limits  to  surrounding  farm 
territory  for  an  educational  democracy  are  among  the  efforts 
of  rural  life  to  stretch  its  boundaries  in  order  to  accommodate  its 
expanding  institutional  consciousness. 

New  types  of  municipality.  One  state  has  actually  em- 
powered its  rural  people  to  create  a  new  type  of  rural  munici- 
pality out  of  any  number  of  school  districts.  This  statute  stands 
as  a  weathervane,  showing  the  way  the  wind  is  blowing.  A 
desire  for  an  easier  position,  for  a  better  attitude  for  working 
together,  for  a  broader  base  for  social  operation  and  for  selec- 
tion of  the  right  people  to  cooperate  with,  —  this  is  the  meaning 
of  the  uneasy  twisting  and  wriggling  of  rural  populations. 

In  another  state,  villages  have  for  many  years  been  enabled 
by  law  to  build  and  maintain  by  tax  a  community  house ;  Hke- 
wise  cities;  also  the  rubber-stamp  square  townships.  But 
certain  farm  population  groups  lying  in  parts  of  two  or  more 
townships  also  desired  community  houses.  So  a  bill  was  framed 
and  introduced  into  the  legislature,  permitting  parts  of  town- 
ships to  be  formed  into  a  municipal  district  for  the  building  and 
maintenance  of  a  community  house ;  not  only  parts  of  town- 
ships, but  parts  of  townships  along  with  a  village  or  city ;  and 
even  a  ward  of  a  city  alone,  or  along  with  parts  of  one  or  more 
townships.  The  only  requirement  is  that  the  territory  shall  be 
compact,  at  least  sixteen  square  miles  in  area,  or  containing  a 
population  of  at  least  500  persons. 

Rural  planning  and  land  policies.  "  Rural  planning  "  is  a 
present  popular  subject  for  debate  in  legislative  halls.  A  state 
commissioner  of  rural  planning  and  county  boards  of  rural 
planning  form  the  heart  of  the  program.  The  commissioner 
of  rural  planning  should  be  a  specialist  on  the  aesthetic  side  of 
country  life.  He  should  see  the  streamside  possibiUties,  the 
country  park  sites,  the  scenic  effects  which  could  be  worked 
into  the  highway  system.     Standards  of  landscape  beauty  for 


404  AGRICULTURAL  ECONOMICS 

public  and  private  use  would  be  the  outcome.  These  things 
will  without  doubt  eventually  be  provided  for  in  statutes. 
Land  policies  of  great  scope  and  influence  upon  country  life  are 
bound  to  be  more  and  more  the  subject  of  legislative  enactment. 
Legislation,  if  well  considered,  will  rest  upon  investigation, 
study,  research.  It  is  a  very  hopeful  sign  that  an  American 
Association  for  Agricultural  Legislation  has  been  formed,  to 
furnish  an  impetus  toward  legislative  study,  publicity,  and 
wise  enactment  of  law.  A  fundamental  doctrine  of  true  popu- 
lation grouping  seems  needed  most  of  all.  Following  this, 
surveys  may  establish  the  location  of  these  groups.  Institutions 
will  thereupon  spring  up  within  these  groups,  and  relations  will 
be  estabhshed  between  group  and  group,  making  it  possible 
for  the  farm  population  to  be  connected  vitally  with  the  currents 
of  national  life  and  progress.  Hope,  culture,  and  privilege 
will  thus  follow  freedom  and  the  instruments  of  freedom. 


CHAPTER  XXX 

METHODS  OF  STUDYING  AGRICULTURAL  ECONOMIC 
QUESTIONS 

In  the  preceding  chapters  it  has  been  assumed  that  the 
farmer  possessed  the  knowledge  essential  to  the  passing  of 
judgment  upon  the  relative  profitableness  of  crops,  the  best 
method  of  disposing  of  crops,  the  choice  of  livestock  enterprises, 
and  the  choice  of  agencies  of  production  with  respect  to  kind, 
quality,  and  the  amount  of  each.  A  perfect  knowledge  on  these 
points  will  never  exist ;  the  problems  to  be  solved  always  involve 
the  future  with  its  unknown  factors  to  lend  uncertainty.  It  is 
true,  however,  that  a  better  knowledge  of  past  results  and 
present  conditions  add  greatly  to  the  accuracy  of  judgments 
regarding  what  to  do  in  managing  a  farm  or  in  planning  legis- 
lation affecting  agriculture. 

Our  knowledge  of  the  character  of  economic  forces  comes 
through  reasoning  based  upon  the  available  facts.  In  economics 
as  in  other  sciences,  the  work  of  the  student  consists  in  gathering 
facts,  sifting  and  classifying  them,  formulating  hypotheses, 
gathering  more  evidence  with  which  to  test  the  tentative  con- 
clusions,until  all  the  relevant  facts  have  been  considered  and  the 
correct  conclusions  drawn.  Through  these  processes  it  should  be 
possible  in  time  to  approximate  the  truth  regarding  the  operation 
of  particular  economic  forces.  But  the  economist  is  never 
certain  of  having  considered  all  of  the  facts,  and  he  is  ever 
hoping  to  formulate  a  new  hypothesis  which  will  more  completely 
explain  the  evidence  in  his  possession. 

Theoretical  work  in  general  may  be  divided  into  two  classes, 
the  sterile  and  the  fruitful.  The  sterility  of  the  theories  of  the 
one  class  is  usually  due  to  failure  to  see  the  problem  in  its  entire 
setting.    The  conclusions  are  sterile,  as  a  rule  not  because  of 

405 


4o6  AGRICULTURAL  ECONOMICS 

illogical  thinking,  but  because  the  premises  are  incomplete  and 
the  conclusions  therefore  erroneous.  The  fruitfulness  of  the 
other  class  of  theories  is  due  to  the  fact  that  they  are  in  harmony 
with  the  facts  and  become  a  guide  to  the  mind  in  comprehending 
the  direction  and  strength  of  the  forces  with  which  the  practical 
man  has  to  deal  and  hence  increase  the  accuracy  of  his  judgments 
regarding  the  probable  conditions  of  the  future  with  which  he 
has  to  make  his  present  actions  harmonize. 

The  danger  of  holding  to  half  truths  is  very  great  in  the  field 
of  economics.  The  forces  involved  are  so  numerous  and  the 
facts  so  scattered  that  even  the  most  careful  student  is  in  danger 
of  placing  too  great  reliance  upon  a  premature  conclusion.  And 
yet  practical  men  everywhere  are  constantly  dealing  with 
economic  forces.  Day  after  day  they  are  passing  judgment 
on  the  future  action  of  these  forces.  Practical  business  men 
often  show  a  clearer  grasp  of  the  operation  of  economic  forces 
than  do  the  economists  of  the  chair.  This  is  because  the 
business  men  are  dealing  directly  with  these  forces. 

The  student  must  study  economic  forces  in  operation  if  he 
would  understand  their  character.  The  world  of  economic 
activities  should  be  the  laboratory  of  the  economist,  and  the 
records  of  these  activities  should  constitute  his  library.  The 
success  of  the  student  depends  equally  upon  his  ability  to  gather 
data  and  his  ability  to  draw  correct  inferences.  It  may  be 
true  in  some  subjects  that  a  person  who  is  not  capable  of  drawing 
conclusions  will  be  able  to  work  independently  and  contribute 
to  the  subject  by  gathering  data  which  others  may  use,  but  in 
the  field  of  economics  the  problems  are  so  complex  that  in  order 
to  secure  valuable  results  the  two  processes  must  be  employed 
simultaneously.  No  student  should  undertake  independent 
research  work  in  economics  who  is  not  a  good  logician.  He  must 
be  capable  of  correct  reasoning.  He  must  be  capable  of  drawing 
the  right  inference  from  given  facts  and  of  remembering  the 
limitations  of  the  basis  of  his  reasoning.  When  a  working 
hypothesis  is  formulated,  it  should  be  looked  upon  as  a  means 
to  an  end,  not  as  an  end  in  itself.  In  other  words,  he  must 
be  capable  of  independent  work  in  the  field  of  economic  theory. 


METHODS  OF  STUDYING  AGRICULTURAL  QUESTIONS      407 

Possessing  this  qualification,  the  student  should  devote  most 
of  his  time  to  gathering  data  which  may  form  the  basis  of 
generaHzations  regarding  the  character  and  operation  of  eco- 
nomic forces. 

There  are  many  ways  of  securing  information  on  which  to 
base  judgments  on  economic  questions  relating  to  farming. 
The  farmer  learns  from  his  own  experience.  He  observes  the 
activities  of  others.  He  talks  with  his  neighbors  about  which 
crops  pay  best,  which  methods  of  disposing  of  crops  pay  best, 
the  proper  wages  for  hired  help,  methods  of  renting  land,  and 
every  other  question  which  may  arise  from  time  to  time.  This 
accumulated  knowledge  is  of  very  great  importance  to  any 
farmer  coming  into  the  neighborhood  to  take  up  farming. 

In  recent  years  personal  and  neighborhood  experience  has 
been  made  more  available  than  formerly  by  means  of  the  farm 
survey  method  of  studying  local  farm  management  problems. 
The  farm  survey  has  stimulated  farm  bookkeeping,  which  has  in 
some  instances  developed  into  a  detailed  set  of  records  com- 
plete enough  for  cost-accounting  purposes.  These  methods  of 
studying  the  individual  farm  and  the  farming  of  a  region  give 
valuable  information  regarding  what  is  being  done,  the  ways 
in  which  things  are  being  done,  and  the  financial  results  which 
are  being  secured.  The  important  questions  which  are  left 
unanswered  by  these  methods  of  study  are :  Why  is  the  present 
system  profitable  or  unprofitable  and  what  are  the  reasons  for 
beheving  that  some  other  type  of  farming  may  or  may  not  be 
more  profitable  ?  To  secure  a  basis  for  passing  judgment  upon 
questions  of  this  character  it  is  necessary  to  have  in  mind  the 
conditions  of  agriculture  and  the  demands  for  agricultural 
products  in  the  entire  competing  territory  of  which  the  local 
region  is  a  part.  In  order  to  secure  this  broad  grasp  of  the 
economic  forces  which  determine  what  pays  best  on  the  in- 
dividual farm  and  for  the  nation  as  a  whole,  it  is  desirable  to 
make  an  historical  and  geographical  study  of  the  economic 
forces  which  have  been  and  which  are  in  operation  throughout 
the  competing  territory.  After  all  other  methods  have  been 
exhausted  the  experimental  method  may  have  to  be  resorted 


4o8  AGRICULTURAL  ECONOMICS 

to  in  order  to  secure  some  of  the  results  desired.  It  will  be 
worth  while  to  describe  some  of  these  methods  of  study  briefly 
in  order  to  illustrate  their  use. 

Farm  accounts.  Every  farmer  should  undertake  to  keep 
some  record  of  his  work.  If  he  is  not  much  inclined  to  figures 
and  feels  that  he  does  not  wish  to  undertake  anything  more, 
he  should  take  an  inventory  once  a  year.  A  farm  inventory 
is  a  complete  list  of  all  the  farm  property  owned  by  the  farmer, 
a  Hst  of  his  indebtedness,  and  a  list  of  the  bills  payable  to  him. 
All  the  items  in  the  inventory  are  valued  at  the  time  of  the 
inventory.  By  comparing  the  value  of  property  at  the  begin- 
ning of  the  year  with  that  at  the  end  of  the  year,  the  farmer 
knows  how  much  he  has  gone  ahead  or  fallen  behind  during  the 
year. 

Many  a  farmer  has  thought  he  was  doing  well  because  he  had 
plenty  of  ready  money,  only  to  find  himself  hard  pressed  for 
funds  a  year  later.  For  a  short  time  the  farmer  can  take  in 
money  faster  by  selling  cows  than  by  selHng  milk,  but  in  the 
year's  balance  he  may  have  lost  heavily  by  this  course. 

The  following  summary  of  an  inventory  and  financial  state- 
ment will  help  one  to  understand  the  use  of  this  class  of  records : 

Tarpleywick  Farm 
Summary  of  Inventories,  March  i,  1915-1916 

Real  Estate 

igi5  1916 

I.  Land                       $19,675.00  $19,675.00 

II.   Buildings                      4,739.06  4,649.61 

III.  Water  System                 167.25  201.50 

Total  Real  Estate  $24,581.31  $24,526.11 

Livestock 

IV.  Horses  $  1,015.00  $     930.00 
V.   Cattle                          3,760.00  6,090.00 

VI.   Hogs  105.00  

VII.   Poultry  36.00  37-50 

Vni.   Sheep  18.00  

Total  Livestock  $  4,934-oo  $  7,057-50 

rX.    Produce,  Seeds,  and  Feeds  $  1,273.86  $  i,S34-78 

X.   Miscellaneous  SuppUes  264.90  $      281.90 


METHODS  OF   STUDYING  AGRICULTURAL  QUESTIONS      409 


Equipment 

XL 

XII. 

XIII. 

Horse  Equipment    $ 
Cattle  Equipment 
Poultry  Equipment 
Horse  and  Power 

Machinery 
Miscellaneous 

Equipment 
Carpenter's  Tools 
Farm  House 

136.35 

143.10 

1.20 

1,119.20 

183.50 
30.00 
68.00 

$ 

1 1 1. 00 
130.20 

XIV. 

XV. 

XVI. 
XVII. 

991.8s 

165.55 
20.00 
62.00 

Total  Equipment 
Total  Farm  Property 
Increase  in  farm  prope 

rty 

$  r 

$32: 
$    2 

,681.35 

,735-42 
,145.47 

$  1,480.60 
$34,880.89 

The  first  task  in  taking  an  inventory  is  to  list  and  to  give  an 
accurate  statement  of  the  quantity  of  goods  on  hand  on  the  date 
for  which  the  inventory  is  taken.  The  quantity  of  grain  in  a 
bin,  the  amount  of  hay  in  a  mow  or  in  a  stack,  etc.,  should  be 
ascertained  with  great  care,  using  the  standard  measurements. 

The  Kvestock  should  be  itemized  one  by  one  by  classes  as  to 
kind  and  age,  all  larger  tools  and  machinery  should  be  listed, 
but  small  tools  may  be  lumped  as  garden  tools,  carpenter 
tools,  etc. 

Basis  of  valuation.  The  valuation  of  the  goods  listed  on  the 
inventory  is  the  next  important  task. 

Is  market  price  the  starting  point  for  valuing  each  piece  of 
property  Usted  in  the  inventory?  "At  what  price  shall  I 
inventory  the  oats  grown  on  the  farm  last  year,  and  at  what 
price  shall  I  charge  them  to  the  dairy-herd  accounts?  "  The 
answer  to  this  question  is  not  so  simple  as  one  might  desire. 
The  object  of  the  oats  account  is  to  know  whether  to  grow  oats 
or  some  other  crop  requiring  attention  at  the  same  time  of  year. 
The  object  of  the  dairy-herd  accounts  is  to  know  whether  to  be  in 
the  dairy  business  or  something  else.  There  are  at  least  two 
prices  at  which  the  oats  may  be  inventoried.  The  oats  may  be 
valued  at  the  local  market  price  minus  the  cost  of  hauhng  them 
to  the  market,  or  they  may  be  valued  at  the  local  market  price 
plus  the  cost  of  hauling  them  from  the  market.  Which  of 
these  values  to  place  upon  the  oats,  depends  upon  the  circum- 
stances at  the  farm.    If  the  farmer  is  an  oat  producer  who 


4IO  AGRICULTURAL  ECONOMICS 

sells  a  part  of  his  oats  on  the  local  market  and  is  trying  out  the 
dairy  business  on  a  scale  that  makes  no  demand  for  purchased 
grain,  it  may  be  perfectly  proper  to  value  the  oats  at  the  local 
market  price,  minus  the  cost  of  marketing.  This  is  justified 
on  the  ground  that  it  gives  the  farmer  the  correct  basis  for 
comparing  the  relative  profitableness  of  oat  production  and 
other  competing  enterprises ;  on  the  other  hand,  if  the  farmer 
is  a  dairyman  who  makes  demand  for  large  quantities  of  grain 
beyond  what  he  is  in  a  position  to  raise,  the  oats  may  properly 
be  inventoried  at  the  market  price  plus  the  cost  of  hauhng  the 
same  amount  of  oats  or  other  grain  from  the  local  market. 
This  is  justified  under  these  conditions  on  the  ground  that  in 
considering  the  relative  profitableness  of  growing  oats  and  doing 
something  else  with  a  part  of  his  time,  this  higher  valuation  is 
the  one  the  farmer  must  use  in  determining  what  it  pays  him 
best  to  do.  Furthermore,  when  calculating  whether  to  increase 
or  decrease  the  grain  ration  fed  his  herd,  or  whether  to  feed  oats 
or  some  other  feed,  this  higher  price  is  the  one  which  should  be 
made  the  basis  of  the  calculation  so  long  as  the  dairyman  is  a 
buyer  of  oats  or  substitute  feeds.  Where  the  dairyman  is  a 
seller  of  oats,  the  problem  is  different.  He  then  needs  to  figure 
on  the  basis  of  market  price  minus  cost  of  marketing,  in  deciding 
how  many  cows  to  keep  and  how  generously  to  feed  them. 

Yet  another  condition  may  call  for  still  a  third  basis  of  valuing 
oats.  A  farmer  may  find  it  profitable  to  grow  oats  to  feed  his 
cows,  yet  he  may  not  find  it  profitable  to  grow  oats  to  sell,  nor 
to  buy  grain  to  feed  the  cows.  This  may  be  owing  to  distance 
from  the  market,  or  to  various  other  causes.  In  this  case,  it  may 
be  as  well  to  throw  the  two  accounts  together  and  charge  the 
cows  with  the  cost  of  producing  the  oats.  The  basis  of  deter- 
mining whether  to  grow  oats  or  do  something  else,  then  becomes 
a  matter  of  comparing  the  costs  of  the  different  methods  of 
getting  cow  feeds.  This  is  probably  an  exceptional  condition, 
and  the  question  of  using  cost  as  a  basis  of  valuation  is  not 
looked  upon  favorably,  excepting  where  conditions  rule  out  the 
market  factor  and  put  the  dairyman  on  a  self-sufficing  basis, 
so  far  as  dairy  feeds  are  concerned.    The  disadvantage  of  using 


METHODS  OF   STUDYING  AGRICULTURAL  QUESTIONS      411 

costs  as  a  basis  of  valuation  is  that  it  balances  the  account  and 
carries  any  loss  or  gain  over  to  the  next  account,  thus  blending 
the  profits  of  two  or  more  enterprises,  which  is  contrary  to 
the  aim  of  cost  accounts,  and  reduces  the  system  more  nearly 
to  the  basis  of  simple  bookkeeping  which  shows  the  profit  of 
the  business  as  a  whole. 

Valuation  of  ensilage.  Ensilage  is  a  feed  which  rarely  enters 
into  commerce.  True,  it  is  sometimes  sold  at  a  sale  and  farmers 
have  sometimes  sold  ensilage  by  the  load  to  their  neighbors,  but 
in  general  ensilage  is  made  for  the  exclusive  purpose  of  feeding 
it  on  the  farm.  The  question  then  arises,  How  can  market 
prices  be  brought  to  bear  in  placing  a  value  upon  the  ensilage  ? 
One  method  which  can  be  used  successfully  is  to  start  with  the 
price  of  corn  on  the  local  market,  subtract  the  cost  of  husking 
the  corn  and  hauling  it  to  market.  The  corn  value  thus  obtained 
plus  the  value  of  the  dry  stalks  in  the  field  may  be  the  basis  of 
valuing  the  standing  corn  in  the  field  at  the  time  when  it  is  cut 
for  ensilage.  To  this  should  be  added  the  cost  of  harvesting 
the  corn  and  putting  it  in  the  silo.  The  storage  costs,  including 
interest  and  depreciation  upon  the  silo  and  shrinkage,  must 
be  added  in  order  to  have  a  complete  basis  of  valuing  the 
ensilage.  This  may  be  called  an  opportunity  cost,  but  differs 
from  actual  cost  in  that  it  leaves  the  same  amount  of  profit 
in  the  corn  account  as  would  have  been  secured  by  producing 
com  for  the  market.  It  also  gives  a  rational  basis  for  charging 
the  ensilage  to  the  dairy  industry,  since  the  cows  must  be  able 
to  pay  at  least  this  much  for  the  ensilage  in  order  that  the 
farmer  can  afford  to  produce  ensilage  instead  of  market  corn. 

Valuation  of  hay.  The  valuation  of  the  hay  in  the  mow 
or  in  the  stack  presents  a  series  of  problems.  Should  the  farmer 
use  cost  of  production  or  the  market  price  as  the  basis  of  valuing 
the  hay?  It  is  a  well-recognized  fact  that  if  all  the  farmers  in  a 
given  dairy  district  should  decide  to  sell  their  clover  hay  instead 
of  feeding  it  to  cows,  they  would  find  the  market  price  dropping 
to  a  very  much  lower  level  than  during  the  time  when  they  were 
feeding  most  of  their  hay,  some  of  them  selling  and  some  of  them 
buying  hay.    In  the  district  where  some  hay  must  be  shipped 


412  AGRICULTURAL  ECONOMICS 

in  to  maintain  the  dairy  herds,  it  is  obvious  that  the  local  market 
price  of  hay,  plus  the  cost  of  hauUng  the  hay  from  the  market 
to  the  farm,  is  the  basis  which  should  be  used  in  calculating 
whether  or  not  it  pays  to  grow  hay,  also  the  basis  for  calculating 
whether  or  not  to  increase  or  decrease  the  number  of  cattle  kept. 
This  then  would  seem  to  be  the  correct  basis  of  valuation  of  hay 
on  hand  at  the  time  of  taking  the  inventory.  On  the  other 
hand,  if  the  farmer's  condition  is  entirely  different  —  if  he  is 
raising  hay  for  the  market  and  finding  it  profitable  to  make 
demand  for  only  a  part  of  the  hay  in  the  dairy  —  he  may  use 
market  price  minus  the  cost  of  putting  the  hay  on  the  market 
as  a  basis  of  valuation  and  as  a  basis  of  calculating  whether  to 
grow  more  hay  or  keep  more  cattle.  For  many  farmers  cost 
of  production  may  prove  a  practical  basis  for  valuing  clover 
hay.  Taking  the  country  as  a  whole,  clover  hay  is  a  farm  feed 
and  has  little  market  except  for  cattle  and  sheep  feed.  It  is 
usually  produced  as  an  adjunct  to  the  livestock  industry  and 
yet  it  is  a  soil  builder  as  well  as  a  feed  for  Hvestock.  The  other 
crops  which  grow  in  rotation  with  clover  benefit  greatly  by  its 
presence  in  the  rotation.  The  livestock  furnish  the  avenue 
through  which  to  market  the  hay.  For  these  reasons  it  would 
seem  correct  to  credit  the  fields  and  charge  the  cows  with  the 
specific  production  cost  of  the  clover  hay  and  return  the  resulting 
fertiUty  to  the  field  without  charge  to  the  field  or  credit  to  the 
cows.  Where  this  view  is  accepted,  clover  hay  will  be  inven- 
toried at  cost  of  production. 

Valuation  of  livestock.  In  appraising  the  dairy  herd  and 
taking  the  annual  inventory  a  value  should  be  placed  upon 
each  animal  in  the  herd.  If  a  cow  has  been  purchased  recently 
it  is  proper  to  inventory  her  at  the  cost  price,  because  this  is 
presumably  the  market  price.  If  a  cow  has  been  on  the  farm  for 
several  years  there  may  be  some  question  regarding  the  price 
at  which  she  should  be  inventoried.  Obviously  the  price  for 
which  she  would  sell  upon  the  date  of  the  inventory  seems  to  be 
a  fair  valuation,  and  if  the  whole  purpose  of  the  inventory  were 
to  ascertain  the  worth  of  all  the  farmer's  assets,  this  would  be 
the  correct  basis  of  valuation. 


METHODS   OF   STUDYING  AGRICULTURAL  QUESTIONS      413 

The  inventory  may  be  taken  for  either  or  both  of  two  pur- 
poses :  To  ascertain  the  farmer's  present  worth,  or  to  balance 
his  accounts  and  ascertain  the  profit  of  his  annual  operations. 
Where  the  object  is  to  ascertain  the  profits  of  operation  during 
the  past  year,  each  animal  in  the  herd  should  be  valued  on  the 
basis  of  the  previous  inventory  and  marking  down  or  up  accord- 
ing to  the  depreciation  or  appreciation  which  has  taken  place 
during  the  year.  Where  the  farmer  is  keeping  his  herd  year 
after  year  without  expectation  of  using  up  the  cows  in  the  dairy 
business,  this  would  seem  to  be  a  satisfactory  basis  of  making 
the  inventory.  If  it  is  possible,  however,  to  use  both  bases, 
place  two  values  after  each  animal,  one  based  upon  last  year's 
inventory  plus  depreciation  or  appreciation,  which  will  give  a 
basis  of  showing  the  results  of  the  year's  operation ;  the  other  is 
to  place  a  value  upon  the  basis  of  present  market  prices.  The 
difference  between  the  sums  of  these  two  sets  of  values  will  show 
the  gain  or  loss  during  the  year  due  to  fluctuation  in  prices. 

Valuation  of  machinery.  Machinery  which  has  just  been 
purchased  may  be  valued  at  the  cost  price.  The  value  of  a 
machine  which  has  been  used  for  one  year  should  be  reduced 
from  the  cost  price  by  the  amount  of  its  normal  depreciation. 
To  value  a  machine  at  the  end  of  the  first  year  at  the  price  at 
which  it  would  sell  if  put  up  at  auction  would  hardly  seem 
fair  to  the  year's  business,  and  yet  if  the  farmer  could  have 
purchased  a  machine  equally  good  at  public  auction  instead 
of  buying  the  new  machine,  it  would  seem  reasonable  to  mark 
the  new  machine  down  to  the  sale  price,  assuming  that  the 
farmer  had  paid  the  difference  for  the  privilege  of  breaking  in 
the  new  machine  and  that  this  should  be  charged  to  his  annual 
expense. 

One  method  of  valuing  machinery  is  to  deduct  a  certain 
percentage  of  the  first  cost  each  year.  This  is  a  very  abstract 
method  of  inventor^dng  and  does  not  get  at  the  real  truth  of 
the  situation.  Each  machine  should  be  looked  over  carefully 
with  a  view  to  ascertaining  the  extent  to  which  it  had  been  worn 
or  broken  during  the  year  so  that  any  extraordinary  deprecia- 
tion may  be  taken  into  account.     Notice  should  also  be  taken  if 


414  AGRICULTURAL  ECONOMICS 

expensive  repairs  have  been  made  during  the  year  which  may 
make  the  machine  more  valuable  than  it  was  at  the  beginning 
of  the  year. 

Receipts  and  expenditures.  While  the  inventory  is  an  indis- 
pensable record,  it  alone  will  not  tell  the  whole  story.  The 
farmer  may  have  made  money  on  the  farm  and  spent  it  on  his 
automobile  or  other  personal  accounts,  so  that  his  net  worth  is 
less  at  the  end  than  at  the  beginning  of  the  year.  In  order  to 
know  what  he  has  made  as  a  result  of  his  farming  operation  it  is 
necessary  (in  addition  to  the  annual  inventories)  to  keep  a  record 
of  farm  receipts  and  expenditures.  This  is  not  a  diflficult  task 
if  each  evening  when  any  expenditure  has  been  made  or  any 
money  received  or  any  transaction  made  where  payment  is  to 
be  made  in  the  future,  a  notation  is  made  in  any  simple  book, 
which  may  be  kept  for  the  purpose ;  the  matters  will  be  ready 
at  the  close  of  the  year,  or  any  previous  time,  for  comparing  the 
farm  receipts  with  farm  expenditures  and  the  old  inventory  with 
the  new ;  the  farmer  may  know  how  much  he  has  made  farming 
during  the  year,  for  the  increase  in  the  inventory  plus  the  in- 
crease of  receipts  over  expenditures  equals  the  farmer's  income, 
which  is  the  return  he  receives  for  his  investments  and  his  own 
labor  and  that  of  his  family. 

Tarpleywick  Farm 

Expenses  and  Receipts,  March  i,  igi^-March  i,  igi6 

Expenses      Receipts 

Livestock  $  830        $  430 

Livestock  products 

Seeds  and  feeds 

Labor 

Miscellaneous  and  taxes 

Total  $3409        $4552 

Balance  $1143 

At  first  a  balance  of  $1143  may  look  very  good,  but  after 
thinking  the  matter  over  the  farmer  says  to  himself :  "  I  have 
made  nothing,  I  could  have  sat  on  the  fence  and  drawn  5  per  cent 
on  the  average  investment  if  I  had  invested  in  farm  mortgages, 
and  that  would  have  amounted  to  $1690.    I  have  lost  $547  by 


3872 

217 

136 

1932 

430 

114 

METHODS  OF  STUDYING  AGRICULTURAL  QUESTIONS      415 

operating  the  farm,  and  I  doubt  whether  the  game  is  worth 
the  candle." 

But  at  this  point  his  attention  is  called  to  the  large  increase  in 
the  number  and  value  of  the  cattle  on  the  farm,  and  the  sugges- 
tion comes  that  after  all  he  may  have  made  some  money  farming. 
Before  drawing  any  conclusions  from  the  purchases  and  sales 
account  the  inventory  should  be  taken  and  compared  with 
that  for  the  beginning  of  the  year. 

It  will  be  noted  that  the  inventory  shows  an  increase  of 
$2145.47  which  must  be  added  to  the  $1143  balance  of  receipts 
over  expenditures.  By  combining  these  accounts  we  have  a 
statement  showing  the  gains  resulting  from  the  operation  of  the 
farm  as  follows : 

Annual  Statement,  March  i 


Total  farm  property 

Expense  of  operation 

Receipts  of  operation 

Interest  on  investment,  at  5  per  cent 

1915 

$32,735-42 
3,409.00 

igi6 
$34,880.89 

1,690.41 

$37,83483 
$  1,598.06 

4,SS2-oo 

Net  return  for  farmer  and  family  for  operation 

$39,432.89 

This  $1598.06  represents  what  the  farmer  gained  by  farming, 
but  does  not  show  whether  he  has  got  ahead  or  fallen  behind 
during  the  year.  The  farmer  and  his  family  may  have  spent 
more  than  they  received,  both  as  interest  and  profits,  or  they 
may  have  made  a  substantial  saving. 

To  find  how  much  he  has  got  ahead  the  bills  receivable  and  the 
bills  payable  must  be  taken  into  account  along  with  the  inven- 
tory.    This  may  be  shown  as  follows : 


Farm  property, 
Bills  receivable 

March  i, 
North 

1915 

1915 

$32,735-42 
150.00 

$32,885.42 

12,423.00 

$20,462.42 

$  1,202.47 

March  i, 

X916 

1916    $34,880.89 
150.00 

Total  Assets 
Bills  payable 
Net  Worth 
Gain  in  Net  > 

$35,030.89 

13,366.00 

$21,664.89 

Thus,  while  the  indebtedness  increased,  the  property  increased 
still  more,  so  that  after  the  family  expenses  were  paid,  which 


4l6  AGRICULTURAL  ECONOMICS 

amounted  to  $406  more  than  the  interest  on  the  farmer's  net 
worth,  the  proprietor  of  Tarpleywick  Farm  was  $1202.47  better 
off  at  the  end  than  at  the  beginning  of  the  year.  This  state- 
ment gives  courage  for  another  year  and  a  copy  of  this  summary 
statement  put  in  the  hands  of  the  banker  will  give  basis  for  a 
better  line  of  credit. 

Farm  crop  accounts.  The  farmer  has  many  lines  of  produc- 
tion from  which  to  choose.  The  problem  of  choosing  the  crops 
which  will  yield  maximum  results  can  be  solved  only  by  a  careful 
study  of  the  conditions  which  determine  the  character  of  farm 
organization.  As  a  rule  the  farmer  does  not  confine  himself 
to  one  crop  but  combines  a  number  of  crops,  for  example,  corn, 
oats,  and  hay  into  one  system  of  crop  rotation.  The  farmer's 
business  problem,  so  far  as  crop  selection  is  concerned,  is  that  of 
selecting  from  each  group  of  competing  crops  the  one  which 
wiU  pay  best  and  combining  as  many  non-competing  crops  as 
can  be  made  to  add  to  the  profits  of  the  farm.  One  who  has 
grown  the  various  crops  can  usually  classify  them  with  reason- 
able accuracy  into  conflicting  and  non-conflicting  groups. 
For  example,  in  southern  Wisconsin  every  farmer  knows  that 
corn,  tobacco,  sugar  beets,  and  potatoes  conflict  with  each 
other,  but  the  question  of  which  of  these  crops  will  pay  the 
farmer  best  is  usually  not  so  clearly  in  mind.  There  are  those 
who  compare  profits  per  acre  and  forget  that  one  can  plant 
and  care  for  three  or  four  times  as  many  acres  of  one  crop  as 
of  another. 

The  most  accurate  method  of  comparing  profits  is  to  keep  cost 
accounts,  which  will  show  the  amount  of  labor  and  other  expenses 
laid  out  on  each  crop  and  the  returns  secured. 

The  accompanying  summary  of  results  of  a  cost  account  will 
help  one  in  understanding  the  way  in  which  cost  accounts  aid 
in  the  selection  of  crops. 

This  table  shows  the  relative  profitableness  of  the  crops  which 
have  been  tried  on  Tarpleywick  Farm.  In  this  case  the  oats  paid 
better  than  the  barley,  although  the  income  or  gross  returns  per 
acre  were  nearly  the  same,  the  expense  in  preparing  the  barley 
land  was  greater ;  hence  the  profits  were  smaller. 


METHODS  OF   STUDYING   AGRICULTURAL  QUESTIONS      417 
Summary  of  Crops  on  Tarpleywick  Farm 


Cbop 

Income 
PEE  Ache 

EXPENDITXJRE 

PER  Acre 

Profit 
PEE  Acre 

Profit  per 
Dollar  of 

EXPDT. 

Barley    .... 

$  20.09 

$16.20 

$  3-89 

$0.24 

Oats 

20.61 

14.72 

5-89 

.40 

Com 

43-29 

23.40 

19.89 

•8S 

Tobacco      .     .     . 

107.25 

65.00 

42.25 

•65 

AlfaHa    .... 

45.00 

30.00 

15.00 

•50 

Clover    .... 

28.71 

17.71 

11.00 

.62 

The  comparison  of  the  relative  profitableness  of  corn  and 
tobacco  is  not  so  simple.  The  tobacco  showed  a  larger  profit 
per  acre  but  a  smaller  return  per  unit  of  expenditure  than  corn. 
The  operating  expense  (aside  from  rent)  being  greater,  one  can- 
not operate  so  many  acres  of  tobacco,  —  probably  not  over 
one  third  as  many  acres.  For  this  reason  profit  per  dollar  of 
expenditure  for  labor  and  equipment  seems  to  be  a  more  practical 
basis  for  deciding  which  of  two  crops  to  grow  than  profits  per 
acre,  although  profits  per  acre  multipUed  by  the  number  of 
acres  one  can  operate  of  each  crop  may  in  some  cases  be  prefera- 
ble to  profit  per  unit  of  labor. 

The  fact  that  oats  are  less  profitable  than  corn  should  not 
deter  the  farmer  from  growing  oats  if  they  are  more  profitable 
than  any  other  crop  which  requires  the  farmer's  energy  at  the 
same  time  of  year.  Even  if  oats  are  less  profitable  than  corn, 
the  com  profits  plus  the  oats  profits  look  much  better  to  the 
farmer  than  the  corn  profit  alone. 

In  order  to  arrive  at  all  the  facts  essential  to  comparing  profits 
the  cost  accountant  keeps  a  record  of  the  hours  of  human  labor, 
horse  labor,  machine  use,  seed,  fertihzer,  twane,  etc.,  put  upon 
each  acre  of  land  in  each  crop.  In  case  of  doubt  as  to  the  relative 
profitableness  of  two  competing  crops,  grow  some  of  each  until 
the  figures  show  clearly  which  pays  the  better.  There  are 
various  systems  of  keeping  cost  records,  any  one  of  which  is 
good.  The  cost  system  should  be  confined  to  a  few  comparisons 
at  a  time,  otherwise  it  becomes  too  much  involved.     If  the  com- 


4l8  AGRICULTURAL  ECONOMICS 

parison  is  between  corn  and  tobacco,  simply  charge  each  of 
these  crops  for  all  it  gets  in  the  way  of  labor  and  supplies  just 
as  one  keeps  an  account  with  a  neighbor  with  whom  labor  is 
exchanged,  from  whom  seed  oats  are  borrowed,  and  to  whom 
some  calves  were  sold  on  account.  Accounts  of  this  kind  are 
invaluable  because  they  show  which  of  two  more  or  less  profit- 
able crops  will  add  the  greater  amount  to  the  total  profits  of  the 
farm.  It  should  be  kept  in  mind  that  in  agriculture  the  purpose 
of  cost  accounts  is  not  to  find  out  the  specific  cost  of  the  different 
products  but  to  ascertain  the  relative  profitableness  of  the 
different  types  of  farming  and  of  the  different  competing  ele- 
ments in  each  type  of  farming.  Not  cost  but  relative  profitable- 
ness is  the  basis  of  answering  all  the  economic  questions  in  farm 
management. 

Livestock  records  and  accounts.  Every  farm  record  should 
form  the  basis  of  answering  an  important  question.  On  the 
dairy  farm  the  production  record  is  of  first  importance.  Where 
the  corn,  the  oats,  and  the  hay  grown  on  the  farm  are  used  in  the 
dairy  and  marketed  in  the  form  of  milk  it  is  a  matter  of  some 
consequence  to  know  what  each  cow  in  the  herd  is  paying  for  her 
feed.  This  requires  feed  records,  milk  records,  and  labor 
records. 

Feed  records  may  be  kept  in  a  simple  manner.  For  example, 
the  farmer  has  decided  that  a  twelve  hundred  pound  cow  should 
be  fed  thirty-five  pounds  of  ensilage  per  day,  twelve  pounds  of 
hay  per  day,  and  a  pound  of  ground  oats  (or  some  other  grain 
equivalent)  for  every  four  pounds  of  milk  produced.  In  order 
to  feed  intelligently  the  herdsman  must  have  definite  figures  in 
mind  for  each  cow  as  he  passes  down  the  alley  with  his  feed  cart. 
If  the  cow  is  cleaning  up  what  she  is  receiving  these  figures  will 
not  usually  be  changed  oftener  than  every  two  weeks  and  then 
the  change  is  in  the  grain  only.  It  is  a  simple  matter,  therefore, 
to  list  the  cows  and  the  amounts  fed  each  on  the  first  of  the 
month  and  make  no  further  entries  until  a  change  is  made  in 
the  ration  of  one  of  the  cows,  which  is  then  entered  with  the 
date.  This  gives  a  satisfactory  record  of  what  each  cow  has 
consumed. 


METHODS   OF   STUDYING   AGRICULTURAL  QUESTIONS      .yn) 

The  right  way  to  keep  a  milk  record  is  to  weigh  the  product 
each  milking  and  have  the  milk  tested  for  fat  once  a  month. 
It  takes  about  five  seconds  to  weigh  and  record  the  weight  of 
the  milk  where  the  record  sheet  and  the  milk  scales  are  con- 
veniently located.  Weighing  the  product  each  milking  is 
worth  while  in  itself  as  it  is  a  means  of  knowing  at  once  if  for  any 
reason  the  herd  or  any  particular  cow  in  the  herd  is  not  doing 
well.  This  record  is  also  the  basis  for  adjusting  the  grain 
ration  from  time  to  time.  The  fat  test  can  be  made  by  the 
farmer  but  the  more  practical  way  is  for  the  farmer  to  have 
the  samples  tested  at  the  creamery. 

Labor  records  show  the  amount  of  time  spent  in  the  operation 
of  the  dairy.  In  addition  to  keeping  general  labor  records 
which  will  show  the  time  spent  on  the  dairy  herd  as  a  whole, 
it  is  desirable  to  take  account  once  a  month  of  the  differences 
in  the  amount  of  time  required  by  the  different  cows.  For 
example,  Mary  and  Molly  give  essentially  the  same  amount  of 
product,  but  Molly  is  easily  milked  in  five  minutes  whereas  ten 
minutes  are  required  to  milk  Mary.  The  number  of  cows  one 
man  can  handle  depends  largely  upon  the  ease  with  which  they 
can  be  milked. 

The  first  object  of  dairy  accounts  is  to  know  whether  or  not 
it  pays  better  to  operate  the  dairy  than  to  sell  the  crops  which 
are  fed  to  the  cattle.  In  answer  to  this  question  the  records 
should  give  basis  for  an  annual  statement  as  follows : 

Account  with  Herd  of  Ten  Cows  for  Year  Ending  March  i,  191 5 

Expenses 

Twenty  tons  of  hay,  farm  value $  240 

Eight  hundred  bushels  oats,  farm  value 480 

Sixty  tons  of  com  ensilage,  farm  value 240 

Labor,  1400  hours 280 

Interest  on  value  of  herd 60 

Depreciation  on  herd 70 

Interest  on  dairy  barn  and  equipment 48 

Depreciation  on  dairy  bam  and  equipment   ....  40 

Salt 7 

Veterinary 22 

Total  cost $1487 


420  AGRICULTURAL  ECONOMICS 

Receipts 

80,000  pounds  of  milk $1300 

Five  veal  calves 47 

Four  heifer  calves 60 

One  calfskin i 

Eighty  tons  of  manure       80 

Total $1488 

Upon  balancing  his  account  the  farmer  often  finds  as  here 
illustrated  that  he  is  just  about  "  breaking  even."  The  dairy 
is  furnishing  a  market  for  his  crops  and  his  labor.  If  it  were 
not  for  the  dairy,  much  time  which  is  put  on  the  cows  would  not 
find  profitable  employment.  The  dairy  provides  employment 
the  year  round  with  emphasis  on  the  winter  months,  while 
the  growing  of  hay,  oats,  and  corn  give  summer  employment 
mainly.  Furthermore,  the  farmer  may  find  that,  while  he  can 
produce  good  ensilage,  the  corn  is  caught  by  the  frost  three  years 
out  of  five  and  that  the  attempt  to  produce  merchantable  corn 
is  a  precarious  undertaking. 

Everything  considered  the  farmer  decides  that  in  spite  of  the 
showing  on  the  balance  sheet  he  can  do  no  better  than  to  continue 
to  produce  milk.  But  if  he  is  thoughtful  he  will  ask  himself  the 
question,  How  can  I  increase  my  production  of  milk  without  a 
proportional  increase  in  cost  ?  By  looking  over  the  herd  record 
he  finds  that  his  best  cow,  Bedelia,  gave  13,500  pounds  of  milk 
testing  3.8  per  cent  butterfat,  whereas  the  poorest  cow,  Lily, 
gave  only  4860  pounds  of  milk  testing  4.2  per  cent.  The  milk 
from  Bedelia  was  worth  $1,675  P*^'"  hundred  or  $226.125 ;  that 
from  Lily  was  worth  $1,725  per  hundred  or  $83,835.  The  total 
charge  against  Bedelia  was  $168.70  and  that  against  Lily  was 
$131.20.  The  profit  on  Bedelia  was  $57.42,  while  the  loss  on 
Lily  was  $47.37.  A  further  study  showed  the  farmer  that  if  he 
could  dispose  of  the  poorest  five  cows  in  the  herd  and  replace 
them  with  cows  as  good  as  the  average  of  the  other  five,  his  net 
profits  on  the  herd  would  be  $260.  The  leading  purpose  of 
milk  and  feed  records  is  to  eHminate  the  "  boarders  "  and  fill 
the  barn  with  high  producers. 

The  cost-accounting  method  is  suited  especially  to  testing  the 
competing  elements  in  a  given  type  of  farming.    The  general 


METHODS   OF  STUDYING  AGRICULTURAL  QUESTIONS      421 

financial  account  including  receipts,  expenditures,  and  inventories 
shows  the  profits  of  a  given  type  of  farming  under  a  given 
manager.  For  example,  if  in  one  region  where  the  conditions 
are  the  same  it  is  found  that  the  farmers  who  are  seUing  cream 
and  some  dairy  cows,  and  hogs  about  equal  in  value  to  the  total 
dairy  receipts,  are  through  a  series  of  years  making  more  money 
than  those  who  buy  cows,  sell  whole  milk  from  a  larger  herd 
but  keep  no  hogs,  it  would  seem  to  indicate  that  the  former  were 
the  more  profitable  type  of  farming.  It  rarely  happens  that 
all  the  farmers  of  a  district  keep  accounts  which  give  basis  for 
such  a  comparison.  In  the  absence  of  financial  accounts  the 
"  Farm  Survey  "  is  a  very  useful  method  of  finding  a  basis  for 
making  up  a  statement  of  the  profits  derived  from  operating  a 
farm. 

The  farm  survey  is  an  attempt  to  get  the  farmer  to  call  to 
mind  what  he  had  on  hand  in  the  way  of  farm  property  of  all 
kinds  at  the  beginning  of  the  year,  the  receipts  and  expenses 
during  the  year  and  the  property  on  hand  at  the  close  of  the 
year,  in  order  that  an  annual  statement  may  be  made  showing  the 
profits  of  operation.  While  these  surveys  lack  much  of  complete 
accuracy,  they  give  basis  for  making  comparisons  which  give 
important  suggestions  regarding  the  relative  profitableness  of 
t)^es  of  farming.  The  farm  survey  has  been  most  useful  in 
stimulating  bookkeeping  on  the  part  of  farmers.  It  is  a  method 
of  permanent  value,  improving  with  the  increase  in  bookkeeping 
by  farmers.  Its  future  use  probably  lies  in  the  field  of  statistics 
rather  than  in  the  field  of  accounting. 

The  historical  method.  Much  is  gained  by  studying  the 
operations  of  economic  forces  through  a  period  of  time.  Eco- 
nomic forces  are  not  easily  measured,  and  they  are  so  numerous, 
of  such  varying  strength,  and  so  often  operate  in  opposite  direc- 
tions that  at  any  given  moment  it  is  difficult  to  make  an  estimate 
of  the  future  resultant  of  these  forces,  unless  the  changes 
wrought  by  them  in  the  past  can  be  resorted  to  as  a  basis  of 
judgment. 

The  federal  census  for  1900  showed  that  more  than  a  third  of 
the  farmers  of  the  United  States  were  tenants  and  about  a  third 


422  AGRICULTURAL  ECONOMICS 

of  the  farms  operated  by  owners  were  mortgaged.  Without  re- 
sorting to  the  historical  method  it  would  have  been  impossible 
to  know  whether  the  forces  making  for  tenancy  were  overbalanc- 
ing the  forces  making  for  ownership,  or  vice  versa.  It  might 
be  inferred  by  one  viewing  these  facts  without  this  historical 
setting  that  ownership  had  once  been  universal  and  that  the 
owners  had  lost  money,  mortgaged  their  farms,  lost  their  titles 
to  the  land,  and  become  tenant  farmers.  On  the  other  hand,  one 
might  infer  that  farmers  were  using  tenancy  and  the  mortgage 
as  means  of  making  transition  from  landless  laborers  to  the 
free  ownership  of  land.  This  illustration  is  to  the  point  because 
inferences  were  drawn  in  1880  when  statistics  of  land  tenure 
were  collected  for  the  first  time. 

At  the  present  time,  with  the  changes  of  thirty  years  recorded 
at  ten-year  intervals,  it  is  possible  to  demonstrate  clearly  the 
trend  of  affairs  during  that  period,  and  to  describe  many  of  the 
forces  which  have  been  operating.  The  available  materials  show 
that  young  men  do  very  generally  rise  through  the  successive 
stages  of  tenant  farmers  and  mortgaged  owners  to  the  free  own- 
ership of  farms,  but  the  data  show  also  that  there  has  been  a 
retardation  in  this  movement  and  that  longer  time  is  required 
to  make  this  movement  recently  than  in  earlier  years.  The 
census  data  for  1890  and  for  1900  show  that  older  farmers  are 
generally  owners,  while  tenancy  is  most  common  among  young 
farmers.  By  comparing  the  data  for  the  two  periods,  it  be- 
comes clear  that  some  force  is  retarding  the  movement  from 
tenancy  to  ownership,  for  a  smaller  percentage  of  those  of  the 
various  ages  were  owners,  and  a  larger  percentage  were  tenants 
in  1900  than  in  1890.  This  is  illustrated  in  Figure  17.  Illinois 
is  used  for  this  illustration  because  tenancy  is  more  common 
in  that  state  than  in  any  other  part  of  the  North.  The  illus- 
tration shows  that  the  percentage  of  owners  among  3^oung  farm- 
ers is  very  small,  but  that  ownership  increases  with  the  age 
of  a  farmer  and  that,  of  the  farmers  fifty-five  years  of  age  and 
over,  about  85  per  cent  are  owners.  By  comparing  the  situation 
in  1890  and  1900  for  each  age  group,  it  becomes  clear  that  while 
there  is  a  movement  toward  land  ownership,  as  the  farmers 


METHODS  OF   STUDYING  AGRICULTURAL  QUESTIONS      423 

grow  older,  it  is  true,  however,  that  a  smaller  proportion  of  the 
farmers  of  each  age  group  were  owners  in  1900  than  in  1890, 
showing  retardation  in  the  movement  from  tenancy  to  free 
ownership.  The  right  hand  illustration  in  Figure  1 7  shows  the 
reverse  situation  with  regard  to  tenancy,  that  tenancy  is  most 
common  in  the  younger  age  groups  and  gradually  decHnes. 
A  careful  study  of  the  facts  now  available  shows  that  many 
forces  are  in  operation,  some  making  for  dependent  tenants 
others  for  independent  landowning  farmers. 

Another  example  of  the  historical  study  of  economic  forces  is 
afforded  by  the  sheep  industry  in  the  United  States.  Between 
1840  and  1850  there  was  a  decHne  in  the  number  of  sheep  kept  in 
parts  of  Vermont  and  in  the  eastern  part  of  New  York,  but  the 
marked  change  was  in  Ohio  and  Michigan,  where  there  was  a 
great  increase.  The  tendencies  were  the  same  in  Vermont, 
New  York,  Ohio,  and  Michigan,  between  1850  and  i860,  with  an 
important  beginning  of  the  sheep  industry  in  Texas,  California, 
and  Oregon. 

The  decade  from  i860  to  1870  brought  a  reaction  in  north- 
eastern Ohio  and  the  beginnings  of  the  concentration  of  the 
sheep  industry  of  Texas  in  the  dry  lands  of  the  South.  Both 
of  these  movements  continued  during  the  next  decade.  By 
1880,  Vermont  had  almost  ceased  to  be  a  sheep  state,  and  the 
sheep  of  New  York  were  but  a  handful  in  comparison  to  the 
number  in  1840,  but  the  beginnings  of  the  new  industry  in  the 
Rocky  Mountain  states  were  already  important  in  Colorado, 
Wyoming,  and  Montana.  During  the  next  two  decades  the 
development  of  the  sheep  industry  in  the  mountain  states  con- 
tinued, but  between  1890  and  1900  a  marked  decHne  is  shown  in 
California,  Texas,  Wisconsin,  Michigan,  and  Ohio. 

When  the  maps  for  1840  and  1910  are  compared,  it  becomes 
evident  that  during  the  seventy  years  the  sheep  industry  made  a 
complete  shift  with  the  exception  of  a  few  counties  in  Pennsyl- 
vania and  Ohio,  so  far  as  the  concentrated  centers  of  production 
are  concerned.  By  reading  the  agricultural  papers  of  this  period 
one  finds  many  references  to  these  changes.  A  well-known 
Merino  breeder  of  Vermont  in  one  decade  is  heard  from  in  the 


424  AGRICULTURAL  ECONOMICS 

next  decade  from  California  where  he  is  in  the  same  business. 
The  method  of  driving  sheep  from  Ohio  to  Texas  is  described 
and  in  fact  the  student  who  has  the  time  and  abiH'ty  can  easily 
reconstruct  the  whole  movement  of  the  sheep  industry,  from  the 
days  when  Vermont  and  New  York  led  in  this  industry  to  the 
present  day  with  the  Rocky  Mountain  states  in  the  dominant 
position. 

The  story  is  only  half  told,  however,  until  it  is  explained.  To 
explain  these  changes  it  becomes  necessary  to  write  the  history 
of  the  expansion  of  American  agriculture.  The  competition  of 
the  various  farm  enterprises  has  played  an  important  part.  The 
result  of  this  competition  is  determined  by  geographic  factors. 
Topography,  climate,  and  nearness  to  the  market  are  important 
examples. 

In  Vermont,  New  York,  northeastern  Ohio,  and  in  Wis- 
consin, wool  growing  was  driven  out  by  the  dairy  industry. 
This  is  indicated  by  contemporaneous  literature.  Statistics  of 
the  dairy  industry  were  not  collected  in  1840,  but  the  milk 
production  statistics  as  shown  by  the  census  for  19 10  indicate  the 
presence  of  this  industry  at  the  latter  date  in  the  regions  which 
were  in  the  earlier  decades  important  centers  of  the  sheep  in- 
dustry. The  economic  principle  involved  is  simple.  Wool 
is  durable,  dairy  products  are  perishable.  The  value  of  wool 
per  pound  is  much  greater  than  milk  and  has  often  been  greater 
than  butter  and  cheese.  The  dairyman  at  a  distance  from 
the  market  for  dairy  products  cannot  compete  with  the  one  near 
the  market  so  well  as  the  shepherd  in  the  distant  hills  and  downs 
can  compete  with  the  wool  grower  near  the  center  of  population. 

Beef  cattle  replaced  sheep  in  Texas,  the  development  of  agri- 
culture and  fruit  growing  by  irrigation  was  an  important  factor 
in  CaHfornia,  and  tariff  legislation  played  an  important  part  in 
forcing  out  the  sheep  in  Ohio  and  Michigan  during  the  nineties. 
A  careful  study  of  the  operation  of  competitive  forces,  with  and 
without  artificial  price  levels,  enables  the  student  to  discover  the 
workings  of  the  economic  laws  which  have  wrought  the  changes. 

The  geographical  method.  Farming  in  the  various  regions  of 
the  United  States  shows  a  high  degree  of  diversity.    In  one  region 


METHODS  OF  STUDYING  AGRICULTURAL  QUESTIONS      425 

corn,  oats,  hay,  pasture,  dairy  cows,  and  hogs,  constitute  the 
principal  enterprises  combined  upon  the  individual  farm.  In  an- 
other region  the  combination  is  the  same  with  the  exception  that 
more  emphasis  is  given  to  corn  and  hogs,  and  beef  cattle  replace 
the  dairy  cows.  In  other  regions  the  livestock  is  unimportant 
and  special  crops  as  wheat,  cotton,  or  cane,  stand  out  as  the 
dominant  enterprise,  while  in  still  other  regions,  the  grazing  of 
cattle  or  sheep  becomes  the  principal  enterprise. 

These  variations  in  farm  organization  are  due  to  differences 
in  soil,  climate,  labor  supply,  market  relations,  etc.  The  expla- 
nation of  differences  in  t^-pes  of  farming,  so  far  as  they  are  due 
to  differences  in  environment,  is  the  purpose  of  the  geographical 
method. 

The  geographical  method  may  be  illustrated  by  comparing 
the  distribution  of  spring  wheat,  barley,  and  oats.  These  crops 
are  usually  counted  competing  crops.  They  occupy  the  same 
place  in  the  system  of  crop  rotation  and  they  would  require  the 
attention  of  the  farmer  about  the  same  time  of  year  in  any  given 
region.  A  study  of  their  distribution  shows  a  remarkably 
distinct  division  of  territory  between  these  crops.  In  Minne- 
sota, for  example,  wheat  growing  extends  east  to  a  line  drawn 
north  and  south  through  Northfield.  East  of  this  line  barley  is 
the  dominant  spring  grain  crop.  In  Wisconsin,  barley  produc- 
tion is  concentrated  in  the  east  central  counties  noted  for  their 
high-grade  barley  for  brewing  purposes. 

The  centers  where  oat  production  is  concentrated  are  found 
farther  south.  Central  IlHnois  and  north-central  Iowa  stand  out 
as  regions  where  oat  production  holds  a  highly  important  place 
on  the  farm. 

That  climate  is  one  factor  in  determining  this  division  of 
territory  is  obvious  from  the  nature  of  the  division.  These  crops 
differ  in  their  demands  for  moisture  as  well  as  in  their  require- 
ments with  regard  to  temperature.  Soil  differences  are  said  to 
play  an  important  part  in  this  division  of  territory.  The  rela- 
tion of  the  barley  regions  to  barley  markets  is  in  itself  suggestive 
of  another  geographic  factor  wh'ch  should  be  considered. 

This  study  might  be  carried  further  by  the  use  of  charts  of 


426  AGRICULTURAL  ECONOMICS 

the  various  other  enterprises  which  are  complementary  or  sup- 
plementary to  the  group  of  competing  crops.  Such  maps  would 
show  the  spring  wheat  region  to  be  a  flax  region  and  the  oat 
regions  to  be  corn  regions,  etc.  This  method  followed  out  com- 
pletely with  maps  of  livestock,  as  well  as  crops,  would  show  the 
type  of  farming  in  any  agricultural  region. 

The  maps  showing  the  type  of  farming  should  be  accompanied 
with  maps  showing  the  topography,  the  soil,  the  length  of  the 
growing  season,  the  temperature  during  the  growing  season,  the 
rainfall,  the  market,  the  agricultural  population,  the  manufac- 
turing population,  the  mining  population,  etc.,  all  of  which  help  to 
explain  the  types  of  farming  in  terms  of  geographical  differences. 

The  statistical  method.  The  statistical  method  stands  for 
quantitative  study.  Much  of  our  knowledge  of  economic 
forces  corresponds  to  qualitative  analysis  in  chemistry.  The 
force  is  noted  but  not  measured.  The  statistical  and  ac- 
counting methods  look  to  the  measurement  of  forces,  thus 
putting  the  work  on  a  quantitative  basis.  In  the  treatment  of 
every  subject  and  in  the  use  of  all  other  methods,  all  data  which 
lend  themselves  to  counts  or  measurements  should  be  treated 
statistically. 

There  are  specialists  who  devote  themselves  to  the  collection 
and  the  tabulation  of  statistics.  Their  finished  product  is  raw 
material  for  the  agricultural  economist. 

Sources  of  statistical  data.  There  is  no  one  greater  source 
of  material  for  the  student  of  agricultural  economics  than  the 
reports  of  the  federal  census.  They  contain  the  only  comprehen- 
sive source  of  material  from  which  it  is  possible  to  ascertain 
the  type  of  farming  in  every  section  of  the  United  States.  This 
gives  the  basis  for  the  study  of  comparative  agriculture,  which  is 
one  of  the  best  methods  of  gaining  knowledge  of  the  economic 
forces  which  determine  the  actions  of  farmers. 

Not  only  the  type  of  farming,  but  also  the  economic  status  of 
the  farmer  is  shown  by  the  census  for  every  county  in  the  United 
States.  Both  the  white  and  the  colored  farmers  are  divided  into 
seven  classes,  based  upon  the  relation  they  sustain  to  the  land 
they  cultivate. 


METHODS  OF  STUDYING  AGRICULTURAL  QUESTIONS      427 

The  census  reports  give  the  data  on  which  to  base  historical 
studies  of  the  changes  which  are  taking  place  in  the  type  of 
farming  and  in  the  status  of  the  farmer,  as  well  as  a  basis  for 
comparative  study  at  a  given  time. 

The  first  agricultural  census  was  taken  in  1840.  This  first 
census  of  agriculture  was  a  crop  and  livestock  census.  In  1850, 
general  farm  data  were  added  and  other  improvements  have  been 
added  each  decade  since. 

In  1880,  tenure  statistics  were  added.  Thus  the  basis  for 
studying  changes  in  the  type  of  farming  extends  over  a  period 
of  seventy  years  and  the  data  for  studying  changes  in  the  status 
of  the  farmer  are  available  for  thirty  years. 

Too  little  use  has  been  made  of  these  valuable  materials  in  the 
past.  Two  methods  which  the  writer  has  found  useful  in  the 
utiHzation  of  these  statistics  may  be  mentioned : 

The  system  of  mapping  already  illustrated  providing  a  chart 
with  close  gradation  of  variation  in  density  for  each  fact  pre- 
sented in  the  census,  puts  the  materials  in  form  for  ready  com- 
parisons both  historical  and  geographical.  Not  only  does  the 
series  of  maps  show  the  changes  in  the  localization  of  each  line  of 
production  through  a  series  of  years,  and  show  how  the  territory 
is  divided  between  the  various  hnes  of  production  at  a  given 
time,  but  indicates  also  the  way  in  which  the  different  Hnes  of 
production  are  combined  in  a  given  district,  thus  showing  the 
type  of  farming  in  each  district. 

The  tabular  method  can  also  be  used  to  advantage  in  compar- 
ing types  of  farming.  A  table  indicating  the  proportion  of  the 
improved  land  in  farms  devoted  to  each  crop  shows  the  ultihza- 
tion  of  the  land.  The  character  of  the  crops,  and  the  relation 
between  the  numbers  of  livestock  kept  and  the  amount  of  feed- 
able  products  produced  gives  a  clue  to  the  way  in  which  the 
products  are  utilized,  whether  sold  in  their  original  form  as  a 
product  of  the  field,  or  used  as  a  basis  of  the  livestock  industry. 
While  a  series  of  maps  based  upon  quantities  of  product  can  be 
made  to  cover  the  seventy  years,  maps  showing  crop  acreage, 
which  is  a  better  basis  for  determining  the  utiHzation  of  the 
land,  cannot  be  made  for  the  decennials  prior  to  1880. 


428  AGRICULTURAL  ECONOMICS 

In  making  use  of  the  census  materials,  the  original  statistics 
by  counties  are  of  first  importance.  The  descriptive  material 
which  describes  the  quality  of  the  statistics  is  next  in  impor- 
tance. The  text  which  is  intended  to  supplement  the  statistics, 
while  useful,  is  of  less  permanent  importance  then  the  detailed 
statistics. 

State  census  reports,  the  annual  reports,  and  more  recently, 
the  Year  Books  of  the  United  States  Department  of  Agriculture, 
and  the  state  agricultural  reports  contain  valuable  statistics. 
Market  reports  in  trade  papers  and  in  reports  of  boards  of  trade, 
etc.,  provide  statistics  of  use  in  the  study  of  prices.  While 
these  various  sources  are  not  all  that  may  be  desired,  the  student 
will  find  that  anything  he  can  do  for  himself  in  the  collection  and 
tabulation  of  statistics  will  be  but  a  drop  in  the  bucket  in  com- 
parison with  the  data  available  in  these  sources  which  have 
been  prepared  by  the  statistician.  Since  he  is  so  dependent 
upon  these  sources  of  material,  it  is  important  that  the  agricul- 
tural economist  be  in  close  touch  with  the  agricultural  statistician 
who  is  preparing  these  source  books. 

The  use  of  market  statistics  may  be  illustrated  by  a  study  of 
the  relation  of  the  price  of  corn  to  the  supply  and  price  of  hogs. 
The  causes  of  the  high  prices  of  hogs  on  the  Chicago  market 
in  1 9 ID  can  best  be  understood  by  studying  the  history  of  the 
hog  and  corn  industries  as  shown  by  the  market  statistics. 
When  the  statistics  of  prices  are  studied  it  is  an  undeniable  fact 
that  hog  prices  were  higher  in  1910  than  they  had  been  at  any 
other  time  for  a  long  series  of  years,  as  shown  in  Figure  23. 

The  general  theory  being  accepted  that  this  rise  in  price  must 
be  due  to  some  change  in  the  conditions  of  supply  or  the  condi- 
tions of  demand,  the  student  should  proceed  to  study  the  con- 
ditions of  supply  and  demand.  By  charting  the  supply  of  hogs 
on  the  Chicago  market  month  by  month,  the  fact  becomes  clear 
that  during  the  years  1909  and  1910  the  supply  of  hogs  was  un- 
usually short.  The  price  of  hogs  was  unusually  high  during 
the  same  period.  Little  time  is  required  to  make  the  inference. 
But  what  was  the  cause  of  the  shortage  of  hogs  ?  One  may  pro- 
ceed to  formulate  hypotheses  which  may  be  put  into  the  form 


METHODS   OF   STUDYING   AGRICULTURAL   QUESTIONS      429 

of  questions.  Has  some  pestilence  ravaged  the  hog  lots  of  the 
country  ?  Has  there  been  a  failure  of  the  crops  which  are  used 
as  hog  feed?  Corn  being  the  principal  hog  feed,  we  may  ask, 
has  the  demand  for  corn  for  other  purposes  been  unusually 


Figure  23.  —  Relation  of  the  price  and  supply  of  hogs  to  the  price  of  corn 

at  Chicago. 

The  price  curves  are  so  drawn  that  when  one  bushel  of  corn  produces  10  pounds 
of  pork,  the  amount  which  the  hog  price  curve  rises  above  the  corn  price  curve 
represents  the  net  returns  from  the  extra  labor  of  breeding  and  feeding.  In  1906 
and  1907  there  was  a  large  profit  in  feeding  corn  to  hogs,  while  in  1908  there  was 
a  loss.  The  figures  on  the  margin  represent  the  monthly  high  price  of  corn  in 
cents  per  bushel ;  the  monthly  high  price  of  hogs  in  tenths  of  cents  per  pound  and 
the  monthly  receipts  of  hogs  in  tens  of  thousands. 

great?    These  conjectures  as  to  the  cause  of  the  scarcity  of  hogs 
leads  to  the  charting  of  the  Chicago  price  of  com. 

During  the  years  1906  and  1907  the  price  of  hogs  was  very 
high  in  proportion  to  the  price  of  corn.  The  supply  of  hogs 
was  relatively  short  during  the  early  part  of  the  period,  but  by 
the  beginning  of  1908  the  supply  of  hogs  on  the  Chicago  market 


43°  AGRICULTURAL  ECONOMICS 

reached  an  unusually  high  mark.  During  the  year  1908  the 
corn  price  curve  held  steadily  and  appreciably  above  the  hog 
price  curve.  On  the  assumption  that  a  bushel  of  corn  is  required 
to  produce  ten  pounds  of  pork,  this  meant  a  loss  on  the  corn  as 
well  as  on  the  time  employed  in  feeding ;  ten  to  one  is  the  price 
relation  in  the  chart.  The  distance  which  the  curve  showing 
hog  prices  rises  above  the  curve  showing  corn  prices  shows  the 
return  for  labor  in  feeding.  In  1908  this  was  a  minus  quantity. 
This  condition  had  not  existed  during  the  prior  fifteen  years. 
Early  in  1909  the  curves  were  close  together,  but  the  corn  price 
was  downward,  while  the  hog  price  was  unusually  high.  Early 
in  1910  hog  prices  started  down. 

So  soon  as  the  situation  as  to  the  price  of  corn  and  hogs  and 
the  supply  of  hogs  after  1907  is  impressed  upon  the  mind,  it  is 
hard  to  keep  from  making  the  inference  that  because  hogs  were 
fed  at  a  loss  in  1908  many  farmers  ceased  to  breed  hogs  in  the 
usual  numbers.  The  facts  indicate  that  whether  it  was  lack  of 
breeding  or  some  other  cause  the  supply  of  hogs  in  the  country 
was  short,  for  so  high  a  price  for  so  many  months  would  certainly 
stimulate  shipments  if  marketable  hogs  were  to  be  found. 

The  next  fact  requiring  explanation  is  the  high  price  of  com 
in  1908.  A  glance  at  the  curves  shows  that  during  the  greater 
part  of  the  year  the  hog  price  was  quite  normal,  but  the  corn 
price  was  abnormally  high. 

The  receipts  of  corn  on  the  Chicago  market  in  1908  were 
34,000,000  bushels  below  that  of  the  previous  year,  and  the 
lowest  they  had  been  since  1895,  with  the  exception  of  the  years 
1901  and  1902  when  the  receipts  were  low  and  the  price  high 
owing  to  the  short  corn  crop  of  1901.  But  why  this  shortage 
in  receipts  of  com  on  the  Chicago  market  in  1908? 

The  corn  crop  of  1907  was  less  than  it  had  been  for  the  two 
preceding  years,  but  with  the  exception  of  1905  and  1906  the 
crop  of  1907  was  the  largest  reported.  The  shortage  of  the  corn 
crop  of  1907  under  that  of  1906  was  only  11.5  per  cent,  but 
the  receipts  of  hogs  at  Chicago  during  the  period  when  the 
bulk  of  the  hogs  which  had  been  fed  1907  corn  were  marketed, 
indicate  that  out  of  this  relatively  small  corn  crop  of  1907  an 


METHODS  OF   STUDYING  AGRICULTURAL  QUESTIONS      431 


unusually  large  number  of  hogs  were  fed,  leaving  a  relatively 
short  supply  for  the  market.  Before  drawing  conclusions,  how- 
ever, other  factors  need  be  carefully  investigated  to  make  sure 
that  other  important  forces  were  not  operating  simultaneously. 
These  facts  are  presented  in  this  form  in  order  to  illustrate  this 

Graphic  RtPRtSEMTAiioN  of  Prices  or  Livestock  rttos  on  the  Milvmaukei;  Teed  Market 


TiM£  BrMcwTtti  AA/o  By  YtA/rs  < 


FiGXTRE  24.  —  In  the  winter  of  1916  and  1917  many  dairy  farmers  were  im- 
pressed with  the  idea  that  it  would  pay  well  to  buy  feed  in  the  summer 
and  store  it  for  use  in  the  winter.  A  study  of  this  chart  should  make  one 
better  able  to  judge  whether  the  conditions  of  the  feed  market  in  1916 
and  191 7  were  normal  or  exceptional.  This  is  given  to  illustrate  the  way 
in  which  statistical  study  may  be  used  in  giving  a  broader  basis  for  pass- 
ing judgment  on  a  question  of  this  kind. 

well-known  method  of  putting  statistical  data  in  such  form  that 
their  relations  are  easily  comprehended. 

The  experimental  method.  The  experimental  method  may 
be  used  to  throw  light  upon  many  problems  in  agricultural 
economics.  For  example,  in  order  to  carry  on  investigations  in 
intensity  of  culture,  this  method  must  be  employed.  Some  of 
the  data  essential  to  the  analysis  of  the  economic  problems  of  the 
farm  can  be  secured  by  keeping  records  upon  farms  under  the 
management  of  intelligent  farmers  with  whom  it  is  possible  to 


432  AGRICULTURAL  ECONOMICS 

cooperate.  By  this  method,  the  problem  of  combining  comple- 
mentary enterprises  in  such  a  manner  as  will  keep  the  labor  and 
equipment  employed  as  nearly  continuously  as  possible  and  in 
the  lines  of  production  which  will  prove  most  profitable,  can  be 
worked  out  in  a  manner  fairly  satisfactory.  Furthermore,  the 
contact  with  the  farm  under  conditions  of  normal  commercial 
agriculture  gives  validity  to  the  results  secured  and  gives  the 
opportunity  for  developing  a  system  of  records  which  may  ulti- 
mately be  used  by  an  intelHgent  farmer  in  determining  what  to 
produce. 

Wlien  one  turns  from  the  question  of  what  to  produce  to  the 
question  of  how  it  should  be  produced,  the  problem  becomes  one 
which  requires  controlled  experiments.  The  major  economic 
problem  relating  to  the  question  of  how  to  produce  the  articles 
decided  upon,  centers  in  the  question  of  the  proportions  in  which 
the  factors  of  production  shall  be  utilized,  the  best-known  phase 
of  which  is  the  problem  of  intensity  of  culture.  This  is  a  ques- 
tion regarding  which  agriculturists,  economists,  and  farmers  have 
theorized  for  centuries,  but  regarding  which  no  adequate  ex- 
periments have  been  carried  out.  In  the  theoretical  analysis  of 
this  problem,  the  point  has  been  reached  where  experiments  are 
essential  to  further  progress. 

The  proper  degree  of  intensity  of  culture  must  be  determined 
for  each  farm,  and  the  result  will  change  with  variation  in  the 
wages  of  labor,  the  cost  of  equipment,  and  the  price  of  land. 
The  first  step  toward  progress  in  this  line  is  the  discovery  of  a 
method  of  experimentation  which  can  be  appHed  upon  any  farm 
without  state  aid  and  without  endangering  the  profits  of  the 
farmer. 

Experiments  with  a  series  of  plots  with  varpng  treatment  are 
valuable  for  ascertaining  physical  and  biological  truths,  but  it 
is  doubtful  if  they  are  of  use  in  the  field  of  economics  for  the 
simple  reason  that  while  the  laws  of  economics  which  determine 
the  proper  degree  of  intensity  of  culture  are  of  general  applica- 
tion, the  conditions  are  so  variable  that  the  proper  degree  of  in- 
tensity on  one  farm  is  not  necessarily  the  proper  degree  on 
another.    Plot  experiments  on  the  intensity  of  culture  would 


METHODS  OF  STUDYING  AGRICULTURAL  QUESTIONS      433 

have  no  practical  value  therefore  except  for  the  farm  on  which 
they  were  made.  Plot  experiments  are  too  expensive  for  the 
practical  farmer,  hence  some  other  method  must  be  contrived. 
It  is  highly  desirable  that  a  method  of  ascertaining  the  proper 
degree  of  intensity  of  culture  be  discovered  and  taught,  but  any 
attempt  at  teaching  more  than  the  principles  involved  and  the 
methods  of  their  application  is  folly,  for  what  is  right  for  one 
member  of  a  class  of  one  hundred  students,  or  one  out  of  an 
audience  of  farmers,  may  be  the  wrong  thing  for  many  of  the 
others. 

Differences  in  the  soil,  in  the  value  of  the  land,  in  the  efficiency 
of  the  farmers,  and  in  facihties  for  marketing  make  differing 
degrees  of  intensity  of  culture  necessary.  Any  method  of 
ascertaining  the  most  profitable  degree  of  intensity  on  any  farm, 
to  be  of  general  use,  must  be  so  planned  that  its  appHcation  will 
not  endanger  the  profits  of  the  farm.  Some  process  of  gradual 
adjustments  suggests  itself  as  most  Hkely  to  succeed. 

The  foregoing  discussion  is  not  intended  as  a  complete  survey 
of  methods  appHcable  to  the  study  of  economic  problems  in 
agriculture.  The  aim  has  been  simply  to  describe  the  methods 
in  common  use  at  the  present  time.  No  one  method  is  fa- 
vored above  another.  All  are  needed  in  securing  an  intensive 
and  a  comprehensive  view  of  the  economic  forces  which  affect 
the  farmer. 


INDEX 


Ability,    variations    in,     103-113;     to 

control  men,    1 10 ;    to  explain,    108  ; 

managerial,  160. 
Accounting  method,  408-421. 
Accounts,    farm    crop,  416;    live  stock, 

418-420. 
Acquiring  land,  means  of,  215-237. 
Agricultural     depression     in     England, 

effect    on    landownership,    312,    313; 

of  1875,  317. 
Agricultural  economics,  defined,  5-7. 
Agricultural  holdings  act,  340-344. 
Agricultural  imports  classified,  72-74. 
Anderson,  James,  310,  326. 

Bakewell,  Robert,  308. 

Banks,  178. 

Barclay,  Captain,  246. 

Bonuses  for  hired  laborers,  175. 

Branson,  E.  C,  387. 

Business  institutions,  395. 

Business  men,  grasp  of  economic  forces, 

406. 
Buying,  neighborhood,  393. 

Caird,  Sir  James,  75,  310. 

Capacity,  79;  defined,  116,  117; 
grades,  choice  of,  126,  127;  illus- 
trated, 1 18-123;  of  cows,  97,  98; 
of  machinery,  95,  96. 

Capital,  93;  and  crop  selection,  52; 
value,  206.     See  also  Equipment. 

Capitalization  of  land  rentals,  205, 
206. 

Carver,  T.  N.,  viii,  139. 

Cash  tenancy,  257;  reasons  for  pre- 
ferring, 301-304;  regulation  of,  302, 
303;  in  England,  323-351- 

Census,  U.  S.,  387,  388. 

Cheese,  federation  of  producers,  in 
Wisconsin,  364. 

Choice  of  crops,  43-S3;  as  affected  by 
rent,  51 ;  under  changing  conditions, 
SO. 

Choice  of  live  stock,  60. 

Choosing  a  farm,  127-130. 

Clubs,  farmer,  393. 


Colored  tenants,  263 .1 

Commercial  agriculture,  22,  23 ;  advan- 
tages,  27-29;    disadvantages,   26,   27. 

Commission,  country  life,  381,  384, 
38s;  milk,  367;   price,  366,  376,  378, 

379- 

Community,  action,  38;    business,  392. 

Compensation  for  unexhausted  improve- 
ments, 335-344- 

Competing  crops,  44-47 ;  relative  terri- 
tory available  for,  48-50. 

Competition  between  live  stock  and 
crops,  58. 

Cooperation,  no,  363,  364. 

Cooperative  credit,  179. 

Copyhold  tenures,  305. 

Com,  44;  competition  with  cotton,  48; 
competition  with  sugar  beets,  49; 
markets,  57 ;   price,  429. 

Cost,  and  price,  38-42 ;  farm  products, 
366-3y9;   of  labor  and  crop  selection, 

52- 

Costs,  disagreements  regarding,  368; 
joint,  369;  specific,  372;  specific 
vs.  comparison  of  profits,  373 ;  varia- 
tion in,  39,  367. 

Cotton,  40,  44 ;  belt,  tenancy  in,  267 ; 
competition  with  com,  48;  farms, 
size  of,  155,  156. 

Country  life,  242,  380-404;   movement, 

384- 

Credit,  226;  cooperative,  179;  systems, 
effect  of,  183,  184;  systems  in  foreign 
countries,  181-183;  sources  of,  178- 
185- 

Crop  accounts,  416-418. 

Crop  competition,  general  principles, 
44-50. 

Crop  selection,  and  character  of  fanner, 
52 ;  and  cost  of  labor,  52 ;  and  supplies 
of  capital,  52 ;  soil  basis,  52. 

Croppers,  298-300. 

Crops,  cheaper  marketing  through  live 
stock,  55 ;  choice  of,  43-53 ;  com- 
peUrive,  44;  competition  with  live 
stock,  58;  feedable,  sold,  56;  fer- 
tilizer  value   of,  54-56;    method    of 


435 


436 


INDEX 


comparing  profits  of,  46;  new  varie- 
ties, 90 ;  rule  for  choosing,  47 ;  sup- 
plementary, 44;  usually  fed,  54; 
usually  sold,  54 ;  variation  in  value 
of,  87;  what  should  the  nation  pro- 
duce, 68-78. 
Curtis,  Charles  F.,  54. 

Dairy    cows,    specialized    types,    dual 

purpose,  60,  61. 
Dairy  industry,  59. 
Darwin,  evolution,  114. 
Demand,  elasticity  of,  37;    for  goods, 

34;    stability  of,  37;    imevenness  of, 

187. 
Diminishing  returns,  92,  132 ;  depressing 

effect  of,  92. 
Distribution,   illustrated,   201,    202;    of 

labor,  45- 
Diversification,  43. 
Dry  farming,  90. 
Duty,  17. 

Economic,  capacity,  79;  efficiency,  80; 
ideals,  68-71;  ideals,  individual  and 
public,  70,  71;  pohcy,  75;  pro- 
ductivity, 84. 

Economics,  and  farm  management,  10, 
11;  defined,  I ;  goods,  31 ;  individual 
vs.  narional  point  of  view,  11,  12;  of 
live  stock,  54;  relation  to  other 
sciences,  7-10. 

Efficiency,  39,  80,  92,  117 ;  and  choice 
of  land,  labor  and  equipment,  198, 
199;  causes  of  variation,  105-113, 
123;  defined,  116,  117;  efiects  of 
variations  in  on  rents  and  profits,  194 ; 
grades,  choice  of,  124-126;  of  cows, 
97,  98;  illustrated,  118-123;  varia- 
tion of  in  men,  103-105 ;  variations 
in,  193- 

Ellsworth,  H.  L.,  250. 

Ely,  Richard  T.,  viii. 

England,  a  land  of  tenant  farmers,  323 ; 
decline  of  landowning  farmers  in, 
305-322. 

Ensilage,  valuation  of,  411. 

Equipment,  classified,  93-95 ;  improve- 
ment of,  96-98;  increasing  new 
supply,  100;  quality  of  new  supply, 
100;  proportion  to  use,  149-151; 
valuation  of,  210-212. 

Exchange  value,  34.    See  Value. 

Expenditure,  414. 

Experimental  method,  431-433. 


Factors  of  production,  discussion  of, 
land,  79-92;  equipment,  93-101; 
labor,  102-115;  combination  of  grades 
of,  116-131 ;   compared,  115. 

Fair  price,  375. 

Faithfulness,  in. 

Family,  farm,  157;  rural,  390;  the  unit 
in  agriculture,  103. 

Farm,  accoimt,  408;  credit,  178-185; 
enterprises,  correlation  of,  62-67 ; 
equipments,  93;  family,  national 
attention  centered  on,  383 ;  home, 
157 ;  houses  classified  by  tenure  and 
age,  264,  265 ;  household,  389 ; 
household,  problems  of,  390;  labor, 
52,  168-177;  laborers,  number  of, 
172-173;  Ufe,  reorganization,  389; 
Ufe,  social  side  of,  380-404 ;  machinery, 
95 ;  management,  viii,  29,  297 ; 
organization,  43-167 ;  management 
problems,  62;  minimum  size  of, 
158,  159;  ownership  and  age  of 
farmer,  264,  265 ;  ownership  and 
tenancy,  251-269;  property  classi- 
fied, 94,  95 ;  work,  analysis  of,  63- 
67  ;  work,  planning  of,  62-67. 

Fanners  and  middlemen,  357-365; 
the  issue  between,  360. 

Farmers'  clubs,  392. 

Farmers,  energy  limitations  on,  162- 
164;  tenant  in  U.  S.,  238-250;  train- 
ing needed,  7. 

Farms,  classified  by  area,  155;  operated 
by  managers,  267 ;  operated  by 
owners,  253 ;  operated  by  tenants, 
254;    size  of,  154-167. 

Federal  Farm  Loan  Act,  183,  184. 

Feed,  prices,  431;   records,  418. 

Feeds,  fertilizer  value  of,  54-56. 

Fetter,  Frank  A.,  205. 

Fluctuations  in  values,  36. 

Free  land,  215. 

Future  outlook,  depressing,  gj;  op- 
timistic, lOI. 

Galpin,  C.  J.,  380,  387. 
Geographical  method,  424-426. 
Gift,  221. 
Grades,  established,  38. 

Habit,  IS,  107. 

Hamilton,  Alexander,  216. 

Hay,  44;  prices,  429;  valuation  of,  411. 

Help,  105.    See  Labor. 

Hired  man,  goal  of,  176,  177. 


INDEX 


437 


Hired  managers,  256. 

Historical  method,  421,  434. 

Hoag,  E.  J.,  380. 

Homestead  Act,  218. 

Honesty,  272. 

Horse  breeding  regions,  60. 

Household,  farm,  389. 

Human  basis  of  production,  102-115. 

Human  wants,  102. 

Ideals,  economic,  68-71. 

Immobility  of  funds,  187. 

Imports,  agricultural,  classified,  72. 

Improved  land,  82,  84,  87 ;  means  of 
increasing  supply,  87-91. 

Increasing  and  diminishing  returns 
illustrated,  135-147. 

Increasing  returns,  132. 

Inheritance,  221. 

Institutions,  educational,  394;  Govern- 
mental, 400;  health,  400;  religious, 
398;  social,  397. 

Insurance  companies  as  lenders  to 
farmers,  180,  181. 

Integrity  as  source  of  income,  232. 

Intensity  of  culture,  134-149,  432 ;  and 
share  tenancy,  146;  four  stand- 
points, 134. 

Interest  in  one's  work,  iii. 

Interest,  the  rate  of,  185-189;  differ- 
ences in,  187-189;  why  paid,  185,  186. 

Inventories,  408,  409. 

Iron  law  of  wages,  199. 

Irrigation,  87-89. 

Joint  costs,  369. 
Jouzier,  Etienne,  5. 
Judgment,  107. 

Kerrick,  L.  H.,  26. 
Knowledge,  108. 

Labor,  45,  52 ;  and  tenancy,  258,  294 ; 
demand  for,  173  ;  improved  quality  of, 
lis;  indirectly  productive,  62; 
methods  of  paying,  174;  proportion 
to  use,  149-151;  records,  419; 
required  on  wheat,  99;  saving 
machinery,  172;  supply  of,  113-115; 
which  to  employ,  113. 

Land,  79-92;  and  stock  share  system, 
293 ;  clearing,  89-91 ;  improved,  82, 
84,  87 ;  supply  of,  87-91 ;  in  farms 
operated  by  tenants,  255 ;  location  of, 
83 ;  not  in  farms,  87 ;  ownership  and 


age  of  farmer,  259-261 ;  policies, 
403 ;  principles  of  valuation,  204- 
210 ;  capitalization  of  rent  of,  205-207 ; 
qualities  of,  81-83;  quality  of  new, 
91 ;  settlement,  220,  239-241 ;  im- 
improved,  87;  uses  of,  79;  variation 
of,  79. 

Landowning  farmers  in  England,  decline 
of,  305-322. 

Land  tenure,  in  United  States,  215-269; 
forms  of  in  United  States,  270-284; 
in  England,  323-351. 

Land  values,  83,  241 ;  and  social 
standing,  210;  causes  of  increase  in, 
207-209 ;  effect  of  character  of  people 
on,  209;  fluctuations  in,  312;  specu- 
lative, 213. 

Landlords,  and  tenants  in  England, 
323-351;  character  of,  273;  in 
United  States,  267-269. 

Law  of  increasing  and  diminishing 
returns,  or  of  variable  proportions, 
132-135- 

Leases,  covenants  found  in  Norfolk 
farm  leases,  347-351 ;  for  long  terms, 
effect  on  agriculture,  329-331 ;  objec- 
tions to,  331,  332 ;  three  years  to  three 
years,  333,  334;  what  they  should 
contain,  273-284. 

Legislation,  agricultural,  404;  road, 
402;    rural,  401. 

Live  stock,  accounts,  418-420;  as  supple- 
mentary enterprise,  58;  competition 
of  on  farms,  58;  competition,  sheep 
and  cows,  59;  condense  crops,  55; 
economics  of,  54;  kind  to  keep,  59; 
valuation  of,  412. 

Loan  associations,  183. 

Location,  83,  129. 

Longworth,  N.,  246. 

Luxuries,  71,  72. 

Machinery,  95 ;  capacity  of,  95,  96 ; 
economy  in  utilization  of,  159;  valua- 
tion of,  413. 

Mail  routes,  rural,  402. 

Malthus'  theory  of  population,  113,  114. 

Man,  as  end,  not  simply  means,  in  pro- 
duction, 102;  his  function  as  pro- 
ducer, 103. 

Man  labor,  distribution  of,  45. 

Managerial  ability,  160. 

Managerial  function,  103. 

Managers,  hired,  256. 

Marginal  utility,  36. 


438 


INDEX 


Marketing,  30;  direct  sale,  352-355; 
farm  products,  353-365;  sale  to  and 
through  middlemen,  355,  356;  the 
farmers'  problem,  20-30,  352. 

Markets,  primary,  57. 

Marshall,  William,  311,  327. 

Method,  of  study,  405-433 ;  accounting, 
408-421;  experimental,  431-433; 
geographical,  424-426;  historical, 
421-424;    statistical,   426-431. 

Middleman,  fair  charges  for  services  of, 
360;    the  farmer  and,  357-365. 

Mill,  J.  S.,  27. 

Miscellaneous  work,  62. 

Money  as  reason  for  working,  13. 

Monopoly,  32. 

Moral  standards,  130. 

Mortgage,  3go. 

Motives,  13-1Q. 

Movement,  tenancy  to  ownership,  266. 

Municipality,  new  types  of,  403. 

National  farm  loan  associations,  183. 
Negro,    tenants,    257,    260,    263,    266; 

slaves,  262. 
Neighborhood,  3QI. 

Neighbors,  no,  3gi ;    character  of,  130. 
New  agriculture,  the,  in  England,  306- 

308 ;     effect    of    on    ownership    and 

tenancy,  324,  326. 
New  crops,  stimulating  introduction  of, 

76-78. 
Noxious  weeds,  275. 

Oat  markets,  57. 

Organization,  theory  of,  40;    farm,  43- 

167. 
Ownership  of  rented  land,  267-269. 

Partnership  property,  293. 

Patriotism  as  motive  for  working,  16. 

People,  character  of,  87 ;  classes  of  in 
agriculture,  102. 

Physical  productivity,  84. 

Piece  work  wages,  176. 

Plan,  adherence  to,  in. 

Planning,  rural,  403. 

Plot,  experiment,  423. 

Plunkett,  Sir  Horace,  380. 

PoUcy,  national,  75. 

Pope,  Essay  on  Man,  quotation,  14. 

Population,  agricultural,  102  ;  census  of, 
387;  growth  of,  91,  92,  96,  113-115; 
movement  to  city,  effect  upon  land- 
ownership,  222,  223. 


Precipitation,  86. 

Preemption  system,  217. 

Prices  defined,  35;  fair,  375;  fixing, 
366-379;    of  corn,  429;    of  hogs,  429. 

Prices,  and  crop  selection,  50 ;  causes  of 
change,  51;  effect  on  choice  by  con- 
sumer, 378;    feed,  431;    relative,  48. 

Pride  as  motive  for  working,  14. 

Primary  markets,  57. 

Productivity,  80,  84 ;   per  man,  gg. 

Profit,  46 ;  basis  of  comparing,  46 ;  per 
acre,  47,  417;  per  dollar  of  expendi- 
ture, 417;  per  hour  of  man  labor, 
46;  sharing,  175;  Walker's  theory 
of,  193;  comparing  by  farmers,  378; 
forces  determining,  193-203 ;  rela- 
tive, 417 ;  total  farm,  as  basis  of  price 
fixing,  371. 

Progress,  effect  of  on  distribution  of 
wealth,  201,  202. 

Property,  94. 

Proportions  of  factors  of  production, 
132-151. 

Quality  of  new  land,  91. 

Rainfall,  86. 

Receipts,  414. 

Religion,  17. 

Rent,   amount   to   be  paid,    279;    and 

profits,    190-203 ;    conclusions   drawn 

from  theory  of,  198,  199;   fluctuations 

of,  51 ;   time  of  paying,  282  ;  and  land 

values,  204-208. 
Research,  cooperative,  387 ;  methods  of, 

405-433- 
Ricardo,   David,    116,    190;    theory   of 

rent,  192. 
Risk,  43,  188. 
Roads,  country,  385. 
Rogers,  J.  E.  T.,  103. 
Roosevelt,  President,  381-383. 
Rural,  investigations,  384;    hope,  381; 

routes,  402. 

Sanitary  conditions,  129. 

Savings,  225. 

Scarcity,  31,  32. 

School  problems,  394,  395. 

Scully  estate,  268. 

Self-control,  108,  109. 

Self-sujQ&cing,  agriculture,  20-23 ;  nation, 

76. 
Selling,  neighborhood,  393. 


INDEX 


439 


Share  tenancy,  2S5-301 ;  the  one-fourth 
system,  288,  289 ;  the  one-third  system, 
289,  290 ;  the  two-fifths  system,  290, 
291 ;  the  one-half  system,  291-300 ; 
the  two-thirds  system,  301 ;  when 
preferred,  286,  287. 

Share  tenant,  146. 

Sheep  regions,  59. 

Sibley  estate,  26S. 

Silage,  44. 

Size  of  farms,  154-167 ;  ancient  beliefs 
regarding,  166,  167;  and  size  of 
families,  158;  and  tenancy,  258; 
cotton,  155,  156;  effect  of  weather 
on,  156;  effect  of  profits  illustrated, 
161;  factors  limiting,  165-167; 
socially  considered,  164,  165 ;  wheat, 
15s;  in  England,  318. 

SkiU,  106. 

Slaves,  in  i860,  262. 

Small  farmers,  disappearance  of  in 
England,  318. 

Soil,  character  of,  128. 

Specialization,  43  ;  in  production,  24. 

Specific  costs,  372. 

Speculative  values,  213. 

Spilhnan,  W.  J.,  viii. 

Standardization,  38. 

Statistical  method,  426-431. 

Substitutions,  37. 

Sugar  beets,  competition  with  com,  49. 

Supplementary  crops,  44. 

Surveys,  community,  387 ;  farm  manage- 
ment, 407 ;  health,  387 ;  rural,  385, 
386 ;   social,  386. 

Tarpleywick  farm,  414,  416,  417. 

Taxation,  234,  277. 

Tenancy,  and  age  of  farmer,  259,  261, 
264,  265 ;  as  stepping  stone,  271 ; 
forms  of  in  England,  323-351;  in- 
crease in,  1880  to  1890,  256;  in 
United  States,  238-304;  in  United 
States  prior  to  1880,  238-250;  in 
United  States  since  1S80,  251-269; 
is  a  certain  amount  a  good  thing,  270 ; 


percentage  of  in  1880,  252;  share  m. 
cash,  285 ;  sources  of  information, 
238. 

Tenant-right,  340. 

Tenants,  farms  operated  by,  254; 
colored,  263.    See  Tenancy. 

Tobacco,  44;  price  control  of  in  Ken- 
tucky, 41. 

Topography  of  United  States,  85. 

Townshend,  Charles,  306,  307. 

Trade  mark,  38. 

True,  A.  C,  224. 

Trust  company,  180. 

Tull,  J.,  306,  307. 

Type  of  farming.  Central  Illinois,  56. 

Unimproved  land,  87. 
Unit  of  organization,  159. 
Utility,  33,  36. 

Valuation,  basis  of,  409;  of  ensilage, 
411;  of  equipments,  210-212;  of 
hay,  411;  of  live  stock,  41s;  of 
machinery,  413. 

Value,  31-42;  of  a  tidy  farm,  275.  See 
Land  values. 

Village,  problems  of,  388. 

Wadsworth  estate,  246-249. 

Wadsworth,  James,  248. 

Wages,  169-172;  iron  law  of,  igg. 

Wages  system  vs.  tenancy,  258. 

Walker,  Francis  A.,  193. 

Wants,  I,  102. 

Warren,  G.  F.,  viii,  159. 

Weeds,  noxious,  275. 

WTieat,  44;  farms,  size  of,  155;  labor 
requirements  in  producing,  99 ;  prices, 
40. 

Wisconsin  cheese  producers'  federation, 
.^64. 

Wool,  59. 

Work,  concentrating  attention  on,  109 ; 
habit,  107 ;  miscellaneous,  62 ;  work- 
ing to  schedule,  109. 


Printed  in  the  United  States  of  America. 


J-c. 


i  f^. 

Tl 1,  /  1  ' 

CAYLORD 

miNTEDIN  U.S.A. 

HDlUll 

Ti+2    Taylor,  Henry  Charles 

1919 

Agricultural  economics 


Hill  nil  II 

12 

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